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PROSPERITY 








PROSPERITY 


A Message 


by 


Charles Dwight Montague 

ii 

membei of the American Society of Mechanical Engineers 


1922 


PUBLISHED BY 

MONOGRAPH PUBLISHING CORPORATION 
NEW YORK 


HG 7S3I 
.fv\fe 

Copy a. 


Copyright 1922 
by 

Monograph Publishing Corporation 
(Published in the United States of America) 


By Transfer 
D, S. Sonata. 
iAAR 1 - 1933 


To TWO American Citizens 


THE WOMAN and THE MAN 

And that Fundamental Institution 

THE AMERICAN HOME 

This, the Voice of one crying in the wilderness, 
is respectfully dedicated 

by . 


THE -AUTHOR 



















































































PROSPERITY 


1 


The Postal Savings System 

# # * 

P8E UDO-PROSPERIT Y 
THE LAW OF CAUSE AND EFFECT 
THE HOUSING SHORTAGE 

A NATION OF HOMES 

INDUSTRY AND THRIFT 

OWN YOUR OWN HOME 
PROBLEMS OF HOME MORTGAGE FINANCING 
THE SOLUTION 

POSSIBILITIES 


1922 

MONOGRAPH PUBLISHING CORPORATION 
NEW YORK 



Note: This is the first of a series of 
Monographs now in preparation, in which 
it is purposed to analyze various other 
National Problems and to advance a com¬ 
mon sense suggestion for their readjust¬ 
ment. 


PROSPERITY 


The Postal Savings System 


contents 


— PSEUDO-PROSPERITY 
(Pages 1-13) 

NATURAL LAW 
THE INEVITABLE PENALTY 
FIRST PRINCIPLES 
THE OUTBREAK 
PROFITEERING IN 1914 
LACK OF PATRIOTISM 
A MONEY MAD NATION 
PSEUDO-PROSPERITY 
THE ROAD TO PROSPERITY 



CONTENTS 


2 — THE LAW OF CAUSE AND EFFECT 

(Pages 15-27) 

THE INDIVIDUAL 
CORRECTING THE CAUSE 
THE IMPELLING MOTIVE 
VIRTUE OR VICE 
NATIONAL ILLS 
THE ANALYSIS 
GREED AND AVARICE 
THE VIRTUES BECKON 
BACK TO FIRST PRINCIPLES 

3 — THE HOUSING SHORTAGE 

(Pages 29-43) 

THE LAW OF SUPPLY AND DEMAND 
CESSATION OF BUILDING OPERATIONS 
INCREASE IN VALUES 
THE PROFITEERING LANDLORD 
A TEMPORARY SITUATION 
URGENT NEED OF A REMEDY 
GOVERNMENT AID 
A PERMANENT SOLUTION 
THE MONEY LENDER’S BONUS 

4 — A NATION OF HOMES 

(Pages 47-56) 

HOME THE FOUNDATION 
THE CRADLE OF PATRIOTISM 
A STURDY CITIZENSHIP 
THE PUBLIC WELFARE 
THE HOME COMMUNITY 
REINTERS AT A DISADVANTAGE 
IDEALITY OF OWNERSHIP 
NEED FOR MORE HOMES 
A NATIONAL RESPONSIBILITY 






CONTENTS 


5 — INDUSTRY AND THRIFT 
(Pages 59-76) 

SUCCESS IN LIFE 
IMPORTANCE OF SAVING 
LAW OF ACCUMULATION 
THE NINE THRIFT RULES 
THE HABIT OF THRIFT 
BEGIN EARLY 
A FIXED PURPOSE 
ROBBING THE BANK 
A PUBLIC BENEFACTOR 


6 -OWN YOUR OWN HOME 

(Pages 79-108) 

A UNIVERSAL DESIRE 
THE ONE-FAMILY HOUSE 
SOME DEFINITIONS 
ACQUIRING A HOME 
THE COST OF OWNERSHIP 
CONSERVATISM COUNSELED 
CARRYING CHARGES 
BUILDING-AND-LOAN ASSOCIATIONS 
ENCOURAGEMENT NEEDED 

7 — PROBLEMS OF HOME MORTGAGE FINANCING 

(Pages 111-118) 

THE HOME OWNER’S DREAD 
“CALLING” THE MORTGAGE 
THE SCARCITY OF MONEY 
WHO IS TO BLAME? 

THE BANKERS’ FORMULA 
PASSING THE BUCK 
THE WORTH OF MONEY 
LOANS AT ECONOMIC WORTH 
A GILT-EDGE SECURITY 





CONTENTS 


8 — THE SOLUTION 

(Pages 121-156) 

THE POSTAL SAVINGS SYSTEM 
THE PLAN 
THE EXTENT 

THE STRENGTH OF THE GOVERNMENT 
NEW ZEALAND 

UNITED STATES POSSIBILITIES 

3% HOME MORTGAGES 

AN ADVERTISING CAMPAIGN 

THE HOUSING SHORTAGE ELIMINATED 

EXTENSION OF POSTAL SAVINGS OFFICES 

A NATION-WIDE THRIFT CAMPAIGN 

THE BORROWER’S CHARACTER 

LOCAL APPRAISAL 

GOVERNING SALES 

THE TORRENS' LAW 

85% MORTGAGES 

THE REFUNDING PLAN 

THE FREE-AND-CLEAR HOME 


9 — POSSIBILITIES 

(Pages 159-179) 

ADVANTAGE TO HOME OWNERS 
20-YEAR REFUNDING 
25-YEAR REFUNDING 
ANNUAL COSTS 

50,000 NEW HOMES POSSIBLE NOW 
NEW ZEALAND’S EXAMPLE 
POWER OF THRIFT 
BILLIONS FOR PROSPERITY 
CONTINUOUS PROSPERITY 





INTRODUCTION 


PROSPERITY: A Message. 

A message to the American People; an appeal to their 
Reason and to their Common Sense. 

The book is idealistic; but the ideals are not new. 

They are the same that inspired those who first came 
to these shores. They are the same ideals that prevailed 
when the Nation was formed. They inspired our Con-i 
stitution; they are written large in its Preamble. 

The World is staggering from the effects of a heavy 
blow. 

Some of the nations are already down, and are taking 
the count. 

The blow has left us bewildered. 

We are not so dazed by shock, though, at the blow 
we took. We are overwhelmed with surprise at the effect 
of the punch we gave. 

We had almost forgotten we had it in us. 

From the moment of Pershing’s solemn classic at the 
Tomb of Lafayette, that khaki-clad army of irresistible 
force carried the Stars and Stripes unfalteringly and 
victoriously against the defenses of the Enemy. And the 


Kaiser threw up the sponge before they had really begun 
to fight. Another American Victory; this time “Made in 
Germany.” 

We are justly proud of the Flower of American Man¬ 
hood. 

But the flash and flare of our successes and our 
extravagances confuse us. 

We must pull ourselves together. 

We have WORK to do. 

A vital internal problem awaits a solution. 

It can be solved for all time if we do it correctly now. 
The need is urgent. 

The author’s purpose will have been served if the 
reader is led first to think and then to ACT. 

C. D. M. 

NEW YORK, NOVEMBER, 1921. 



1 


PSEUDO-PROSPERITY 


1 -NATURAL LAW 

2 -THE INEVITABLE PENALTY 

3 - FIRST PRINCIPLES 

4 -THE OUTBREAK 

5 - PROFITEERING IN 1914 

6 - LACK OF PATRIOTISM 

7 - A MONEY MAD NATION 

8 - PSEUDO-PROSPERITY 

9 -THE ROAD TO PROSPERITY 


1 


* ‘In April, 1917, the United States entered the 
war — to my intense rejoicing, since I had been 
bowed down with shame over the profits which my 
countrymen had been gleaning. ***** 
But though joy filled my heart that we were at last 
fighting on the side of Truth and Mercy ***** 
one of the practical effects upon my countrymen 
filled me with terror. ***** The war 
needs played directly into the hands of those 
whose will it was to drain the people." 

Kendall 


2 


1 


PSEUDO-PROSPERITY 


W HAT CAN BE done to bring about 
a return of Prosperity?” 

This is a National Question today. 
Unfortunately, Prosperity is not a Sub¬ 
stance or Thing that can be constructed at will. 

It is an elusive condition of human affairs 
that follows as a natural Consequence the 
sturdy practice of those old-fashioned princi¬ 
ples — the Virtues. 

It is an Effect of a definite Cause, or of a 
number of Causes. 

In other words, it is governed by an inflex¬ 
ible Natural Law. 

We, as a nation, have broken that Law and 
we are paying the penalty for doing so. 


3 


PROSPERITY 


The operation of Natural Laws is inevitable. 

Obey them and you are certain of your re¬ 
ward. 

Break them, consciously or unconsciously, 
and there is no escaping the consequences. 

It is well known that practice of the Virtues 
will not only prolong the life of the individual, 
but will promote Happiness, Contentment, 
Comfort, and Peace of Mind during that life. 
On the other hand, the practice of the Vices — 
the opposites of the Virtues — will have a con¬ 
trary effect; both on the length of the indi¬ 
vidual’s life and on the condition of his mind 
throughout his existence. 

As some Virtues are more effective, or more 
pronounced, than others, so certain Vices are 
more destructive than others in their Effect on 
the life of the individual. 

This is not preaching. 


4 





PSEUDO-PROSPERITY 


It is the statement of a scientific fact un¬ 
disputed since the beginning of time. 

It is the f undamental principle, not only of 
Mosaic Law and the Christian Religion, but of 
religions and Codes of Ethics that antedated 
their origin by centuries. 

We know it by the name of the Moral Law. 

As with the Individual, so with the Nation. 

The Nation — composed as it is of an aggre¬ 
gation of Individuals — is subject to the opera¬ 
tion of precisely the same Law. But with this 
distinction. It is a more delicate organism. 
While it may apparently be slower in response 
to the operation of a given Cause, and the 
Effect may not become apparent or noticeable 
for a greater length of time than would be the 
case with an Individual, the Nation reacts 
more sensitively to certain Causes than does 
the Individual mind or body. 

Many of us cannot understand why it is that 


5 






PROSPERITY 


after such an unwonted period of exceptional 
expansion as we have had the past few years 
the bottom seems suddenly to have dropped out 
of things. 

Yet the reason is obvious if we will analyze 
the situation. 

Seven years ago when the war broke out in 
Europe there came a sudden and hitherto un¬ 
expected demand for the products of our fields 
and factories. 

A wild scramble on the part of nearly every 
one to make the most of the opportunity im¬ 
mediately followed. Fabulous prices were ob¬ 
tained because of the urgency and need for 
speed. Speculation was rife. Every one was 
affected from the laborer to the usually con¬ 
servative banker, and prices soared. 

It is not to our national credit, and it will 
not be good for reflection in years to come. 
The bare facts are, however, that many people 


6 




PSEUDO-PROSPERITY 


took advantage of every opportunity to profi¬ 
teer and to capitalize the misfortunes of our 
fellow man, the Allies. In some instances they 
over-reached themselves — and sufFered the 
consequences. 

In April, 1917, when the United States was 
drawn into the struggle, it meant to some of 
our business interests the arrival of another 
victim to plunder. More fuel was added to an 
already spreading conflagration. 

It must be confessed that true patriotism 
was not generally spontaneous. It was diffi¬ 
cult, at first, to arouse the masses to a sense of 
impending danger. They could not under¬ 
stand that their liberties were at stake or that 
the nation’s rights had been violated. 

Brass bands, the best speakers, and a high 
rate of interest were the inducements offered 
for popular subscriptions to Government loans 
needed for the defense of the Nation. 


7 





PROSPERITY 


The Government had only to indicate its 
need of any commodity when the price immedi¬ 
ately acquired a tendency to reach the nearest 
star. 

As a nation we were money mad. 

When the orgy — which had been expected 
to continue for some time — came to a sudden 
and abrupt end, the financial revelry had 
gathered such impetus that of its own momen¬ 
tum it ran nearly two years longer before the 
bubble burst. 

During the entire period of this orgy, we as 
a nation seemed to be utterly disregardful of 
the primary principles, attributes and rules of 
the laws that, from all time, have been known 
to be fundamentally necessary to secure pros¬ 
perity. 

We have not only disregarded the principles 
of these Laws, but we have indulged extrava¬ 
gantly in their opposing Vices. To the extent, 


8 




PSEUDO-PROSPERITY 


in fact, that it may almost be said that these 
Vices have become permanent habits with us. 

In obedience to the Law, the continuance of 
these habits will lead us only in the wrong 
direction. 

It was inevitable that the pseudo-prosperity 
we experienced between 1914 and the summer 
of 1920 was not to last because it was not 
founded on sound economic or virtuous prin¬ 
ciples. 

If we are to build substantially and perma¬ 
nently for a new — a real — prosperity, we 
must get back to first principles and adopt them 
as our directing impulses. 

As these lines are being written, a publica¬ 
tion for Women that is an important factor in 
molding public opinion, is spreading broadcast 
an appeal to the good sense of the people to 
“Get Back to Pre-War Morals.” 

We must no longer “see red.” 


9 





PROSPERITY 


To set the requirements in order: We must 
consider the Virtue, or Virtues, whose Tenets 
we have broken, and we must retrace our steps 
m the Direction that leads toward Real Perma¬ 
nent Prosperity. 

The Way is not long. 

The most difficult part of the task is that of 
making up our minds that we really want to 
go. 

Some still think there is an easier road to 
travel; that there is a short cut. This fallacy 
must be dismissed. The experience of ages has 
proved it wrong. 

There is only one road to Prosperity. 


#• * * * * 


10 






PSEUDO-PROSPERITY 


The Road To Prosperity 

This is the Itinerary: 

the start must be made from the City of High Ideals. 

the traveler must carry a supply of the Iron Rations of 

Vision, Determination, Will and Perseverance. 

the guide, whose name is Steadfast Purpose, must accom¬ 
pany the Traveler throughout the journey. He must 
always be kept in sight. Curiously, his services are free. 
He accepts no tips. 

the road is a broad thoroughfare, and it extends the entire 
distance. It is called Thrift Highway. It begins at 
the foot of Economy Hill. 

the route lies through the cities of Prudence, Frugality, 
Industry, Efficiency and Success, and it crosses the 
towns of Confidence, Vigilance, Cooperation and Good 
Husbandry. 

From the places through which the Traveler passes 
he learns many lessons that must be retained through¬ 
out his entire journey. Singularly, the people that he 
leaves behind on his travels are those that forsook the 
Guide and became discouraged while on their way to 
the City of Prosperity. They are obliged to remain 
where they are until they again secure his services. 


11 





PROSPERITY 


The condition of many is deplorable. 

the danger of losing the Guide and getting off the Main 
Highway must always be guarded against. Most allur¬ 
ing devices are used at times to tempt the Traveler from 
the road. The way is constantly beset with dangers of 
this sort. He sees the glare and glitter of folly and 

FRIVOLITY, EXTRAVAGANCE and INDULGENCE, of SPECULA¬ 
TION. Shun them all. 

the approach to the City of Prosperity leads on through 
the broad thoroughfare of Thrift Highway until the 
City appears in sight as the Traveler makes the last 
turn to the right. 

Here the Traveler and his Guide are met by two 
Runners from the City, both of whom are known to 
the Guide, and are introduced — one as Caution and the 
other as Temerity. Each will offer to assist in con¬ 
ducting the Traveler to the City, but by different 
thoroughfares. Each will insist, too, that the route he 
recommends is the better. 

Temerity will offer to take the Traveler there in less 
time. He has, however, several rivers to ford, and a 
dangerous trestle to cross over the swamp of 
Speculation. 

Caution's route lies over the hill of Conservatism, 
and is somewhat longer. The Traveler will be in a 
quandary. But he must choose for himself. He will 





PSEUDO-PROSPERITY 


no doubt be influenced when the Guide tells him that 
only with Caution can he accompany him further. 

the arrival of the Traveler at the outskirts of the City 
of Prosperity is always signalized by an official welcome 
from Contentment. He is waiting on the Highway 
and will give to him the Keys and Freedom of the City. 

the city of prosperity — the end of the Traveler’s pil¬ 
grimage — is a vast domain. Its confines extend in every 
direction as far as the eye can reach. It is as beautiful 
as the hand of Nature and of man can produce. 

Peace and Plenty are everywhere in evidence. 

It is veritably a City of Homes. 

They are of every conceivable type. As the Traveler 
goes with Contentment past little cabins and small 
dwellings with their inviting plots of ground neatly kept, 
or surrounded by expansive fields; through the street of 
Comfort with its homes of Culture and Refinement; 
down the avenues of Luxury and of Ease, where the 
more pretentious homes are found; crossing the boule¬ 
vards of Abundance, Affluence, and Opulence, with 
their homes of Magnificence, he arrives finally at the 
Circle of Attainment. 

* * * * * 


13 





2 


THE LAW OF CAUSE AND EFFECT 


1 -THE INDIVIDUAL 

2 - CORRECTING THE CAUSE 

3 -THE IMPELLING MOTIVE 

4 -VIRTUE OR VICE 

5 - NATIONAL ILLS 

6 -THE ANALYSIS 

7 - GREED AND AVARICE 

8 -THE VIRTUES BECKON 

9 - BACK TO FIRST PRINCIPLES 


15 


“Prosperity doth best discover Vice, but Ad¬ 
versity doth best discover Virtue.” 

Bacon. 


16 


2 


THE LAW OF CAUSE AND EFFECT 


T O THE INDIVIDUAL who thinks, it 
is easy enough to reason from Cause to 
Effect when the problem relates only to him¬ 
self. Conversely, he may trace an Effect back 
to its Cause by the same process. 

Since the entire cycle of creating Cause and 
producing Effect is contained within himself, 
or is within his own observation and control, he 
may change the Cause at will and produce a 
different Effect. If he is a wise man, he will 
do this rather than try to secure a desired 
Effect by some other, and perhaps unnatural, 
means. 

The careful man regulates that all-import¬ 
ant treasure — his health—by this process. 


17 


PROSPERITY 


Ordinary affairs of the home and family are 
also within his immediate power to rectify. 

Ill Effects are remedied by correcting their 
Causes. 

If the roof of the house leaks, the prudent 
man has it re-shingled in place of buying pans 
to catch the water or umbrellas to protect him 
from the rain. The famous excuse that the 
roof couldn't be fixed while it was raining and 
that it didn't need fixing when it did not rain, 
would not impel the average man to buy pans 
or umbrellas. 

Logically and prudently he would fix the 
leak—the Effect — by repairing the roof — 
the Cause of the leak. 

Since Cause and Effect have both their ori¬ 
gin and their termination within the affairs of 
the Individual, he has it entirely in his power 
to control and regulate them. This he can do 
by the exercise of his Will. 



18 





THE LAW OF CAUSE AND EFFECT 


When we pass from consideration of the In¬ 
dividual to that of the Community or of the 
Nation, we find that the action of one man or 
the combined action of a group of men may 
create a Cause. And that the Effect of that 
Cause may be immediate on that man, or on 
that group of men, or it may be evidenced on 
other men or groups of men nearby or even 
remote. 

The ones on whom the Effect is produced 
may have had no part or parcel in the action 
that created the Cause. 

As the impelling motive of the Cause is 
either a Virtue or a Vice, the Effect will be 
either good or evil, as the case may be. 

This is a Natural Law. 

Justice in Human Laws is based on this 
principle. 

When Virtue is the impelling motive in the 
Cause, the Effect on all is Good, and all 


19 




PROSPERITY 


prosper. When Vice impels the motive — par¬ 
ticularly in Community and National affairs 

— the evil Effect is often experienced by those 
in no way responsible for the Cause. 

The innocent suffer. 

The guilty may apparently escape for a 
time—until another Natural Law, called the 
Law of Retribution, commences to operate 

— but that is another story. 

Corrective measures for the disordered 
affairs of a Nation must be applied in the same 
logical manner that they would be in the case 
of an Individual. It is not so easy, however, 
to discern the real Causes of nation-wide 
Effects. Nor is the process of tracing Causes 
from the Effects they produce so simple as 
might appear at first sight. 

This is partly due to the fact that one Cause 
may produce several Effects. Further, any 
single Effect thus produced may in itself com- 


20 





THE LAW OF CAUSE AND EFFECT 


mence to operate as a Cause to produce still 
other Effects — and so on to the end of the 
chapter, until the search is lost in a bewildering 
maze of difficulty and confusion. 

Even when a Cause has been located to the 
satisfaction of all, the remedy is never so easy 
to apply as in Individual cases. So many con¬ 
flicting interests may be involved that what 
would appear to solve one difficulty might 
work incalculable harm in some other and per¬ 
haps unexpected direction. 

The practical side of these aff airs always has 
to be considered. 

No matter how great their need for correc¬ 
tion, it would be most unwise to attempt 
changes until it is definitely known that they 
will produce the desired results. Nor should 
the attempt be made to correct too many faulty 
conditions at one time. Such a course would 
be a serious blunder. It would disrupt affairs. 


21 





PROSPERITY 


It would set in action evils that might be as 
disastrous as the very Effect it is sought to cor¬ 
rect. And at that, the real disturbing Cause 
might not be eradicated. 

Professional economists, statesmen, and 
many broad-minded business men of the 
country have been exhaustively considering the 
Nation’s ills for some time. The results of 
their investigations, and their opinions have 
been given to the public through the press from 
time to time. 

These are some of the conditions known to 
prevail: 


BUSINESS STAGNATION 
CONSPIRACIES IN RE¬ 
STRAINT OF TRADE 
EXHORBITANT TAXATION 
UNSTABLE CURRENCY 
HIGH COMMODITY PRICES 
U8URIOUS MONEY RATES 
INEFFICIENCY OF LABOR 
THREATENED STRIKES 


HOUSING 8HORTAOE 
SO-CALLED CRIME WAVE 
UNEMPLOYMENT 
INCREASE OF SUICIDES 
CORRUPTION OF PUBLIC 
OFFICIALS 


22 


INCREASING DEATH RATE 
SCARCITY OF MONEY 
PROFITEERING 




THE LAW OF CAUSE AND EFFECT 


In other words, these are some of the Effects 
for which Causes must be located, defined, and 
adjusted. 

It is a formidable list, but fairly comprehen¬ 
sive. 

Some of these items evidently are in them¬ 
selves Effects that are the producing Causes 
of still further Effects. So that, apparently, 
if we are able to cure some of these ills, others 
will automatically disappear. 

There is great need of caution. More than 
ever we are faced with the danger of creating 
unfavorable conditions that may bring on un¬ 
foreseen disaster. A wrong move might seri¬ 
ously complicate matters. On the whole, the 
complexity of the situation is appalling. 

Suppose we were to disregard for the mo¬ 
ment these collective ills and evil Effects and 
see if we can locate a Cause that is primarily 
to blame for all the troubles. 


23 





PROSPERITY 


How many of them would be eliminated if it 
were not for two human Vices named GREED 
and AVARICE? 

Don’t answer at once. 

Turn back and read the list over again. 

Think. 

Ponder each carefully in turn. 

Put your own interpretation on the Cause 
for each of the Effects on the list. 

Then ask yourself if that Cause is not, in 
itself, the Effect of some other Cause. 

In this manner trace them back to their 
source, and see if you cannot accuse either 
greed or avarice of being at the root of most 
of these troubles. 

You will find that those you cannot explain 
in this way may be laid at the door of folly. 
Waste, Extravagance, or Dishonesty. 

None are chargeable to an excess of Pru¬ 
dence, Frugality, Economy, Thrift, or Honesty. 


24 





THE LAW OF CAUSE AND EFFECT 


These Virtues are beckoning to us. 

They are calling through the clouds of ad¬ 
versity that hover over us. 

Until we heed that call, we shall not even 
commence to build for a permanent PROS¬ 
PERITY. 

That we shall finally do so is inevitable, for 
no sane man can doubt or distrust the ultimate 
good sense and good judgment of the Ameri¬ 
can People. 

On our firm confidence in this belief rests 
the very foundation of the Government. 

The country has been afforded a practical 
demonstration of the fundamental truth of this 
theory on a scale that leaves no doubt as to its 
soundness. 

Two million railroad men — with their 
families and dependents an appreciable per¬ 
centage of the population —furnished an ex¬ 
ample of good judgment and sound reasoning 


25 





PROSPERITY 


that will long be remembered. By their final 
conservatism they inspired confidence and pro¬ 
moted their own interests in a way that no 
strike could ever have accomplished, even 
though it had occurred and been successful. 

They bowed to the Power of the Govern¬ 
ment. 

They respected that formidable factor, 
Public Opinion. 

And they decided to shift with the rest of 
us in the hope and belief that their problems — 
most of which are equally ours —will be solved 
in a peaceful and peaceable manner, all in due 
time. They have their particular grievances, 
many of which are entitled to the consideration 
and adjustment they will undoubtedly receive. 
Both the leaders and their organizations are to 
be congratulated on their display of sound 
judgment in averting a strike. It is a cheering 


26 





THE LAW OF CAUSE AND EFFECT 


incident in a long array of disheartening 
events. 

Call it Idealism, Theory, or what you will, 
the plain facts are that we as Individuals and 
as a Nation must get back to first principles. 

We must begin at the beginning. 

We must think right. 

If every one puts his shoulder to the wheel, 
it will take only a little effort on the part of 
each. The load will move slowly at first; but 
once it gets under way, no power on earth is 
great enough to stop it, or to impede its 
progress. 

Let us take the evils one at a time and begin 
at the Source. 


* * * * * 


27 




























3 


THE HOUSING SHORTAGE 


1 -THE LAW OF SUPPLY AND DEMAND 

2 - CESSATION OF BUILDING OPERATIONS 

3 - INCREASE IN VALUES 

4 -THE PROFITEERING LANDLORD 

5 -A TEMPORARY SITUATION 

6 - URGENT NEED OF A REMEDY 

7 -GOVERNMENT AID 

8 -A PERMANENT SOLUTION REQUIRED 

9 — THE MONEY LENDER^ BONUS 


29 


"The whole American Public U wild with 
•pending. Public Economy is a lost art." 

J. J. Hill. 




80 



3 


THE HOUSING SHORTAGE 


S INGLED OUT AS a National Problem, 
or Eff ect, special attention may profitably 
be directed to the Housing Shortage. The 
Cause or Causes may be ascertained with little 
effort. They are apparent to every one. 

The solution is simple enough. 

Build more houses! 

But HOW? 

In the Housing Situation we are con¬ 
fronted with a practical illustration of the 
workings of a Natural Law that governs force¬ 
fully and inevitably, even though it is not on 
our statute books — the Law of Supply and 
Demand. 

The Housing Situation is alarming because 


81 


PROSPERITY 


it afreets nearly every individual that occupies 
rented premises. 

No statute laws have ever been provided for 
the regulation of this phase of our life. Hous¬ 
ing of the people has always been left for pri¬ 
vate enterprise to undertake. Nor is there any 
reason, real or apparent, for Government inter¬ 
vention or initiative in such matters. 

Ordinarily it has been profitable for people 
to invest surplus funds in suitable buildings 
for rent — particularly in apartments in the 
larger communities. Therefore, the Supply 
has heretofore about kept pace with the 
Demand. New buildings have usually been 
erected in proportion to the growth of the 
community. 

Under previous normal conditions owners of 
such buildings had their capital invested where 
the return was perhaps slightly more than they 
would receive from a savings bank. In addi- 


82 





THE HOUSING SHORTAGE 


tion there might be some further advantage 
secured ultimately to them from an increase 
in value. 

Such ownership partook of both the invest¬ 
ment and the speculative feature of capital 
operations. It attracted enough people to keep 
available a sufficient number of rental homes. 

Supply was equal to Demand, and prices for 
rents were normal. The renter could find 
quarters suited to his needs at a price that came 
within his means. 

The sudden draft on the resources of the 
country for war supplies — first for the Allies 
and later for ourselves — practically put a stop 
to domestic building operations. High prices 
for labor and material also had their effect. 
For a time not a sufficient number of new 
buildings were erected to replace the fire losses. 
And those erected at the excess cost had to 
bring higher rentals in order to afford an ade- 


33 





PROSPERITY 


quate return on the investment — even a return 
at no higher rate than was formerly received. 

The natural result was an increase in value 
for the buildings already erected. It is gen¬ 
erally conceded that anything is “worth” what 
it will cost to replace it. 

This created a situation of which advantage 
was promptly taken by the building owner or 
landlord. Call it profiteering, or what you will, 
it was only the natural working of the Law 
of Supply and Demand. No doubt it was 
influenced and aggravated in no small degree 
by greed on the part of the landlord in many 
instances. 

The fact remains that the Demand was 
there; and if you did not take the premises at 
the price he chose to ask, another would . The 
shortage existed. Homes must be had at any 
price. 

Clearly the landlord is within his rights when 


34 





THE HOUSING SHORTAGE 


he asks for a rental that is a reasonable return 
on the present value of the property. He may 
be short-sighted in failing to realize that the 
situation is only temporary. 

The inevitable working of the Law of Sup¬ 
ply and Demand will eventually bring read¬ 
justment and establish values on approximately 
their former basis. 

Meanwhile, thousands of people are discom¬ 
fited and disturbed. The machinery of the 
courts is clogged with useless trials and ap¬ 
peals, of benefit only to the lawyers. The 
tranquillity and peace of mind of great num¬ 
bers of the people are destroyed. They are 
wrought to a state where their working 
efficiency is seriously impaired. 

It is assuring to realize that the machinery 
of the Government is being set in motion to 
investigate and remedy the situation. And it 
is re-assuring to note that the fundamental 


35 






PROSPERITY 


causes to which these conditions are due are 
recognized by our executives at the head of 
affairs. 

Important steps for relief are being con¬ 
sidered. 

Aid will not come, perhaps, with the speed 
that distinguished the City of Chicago when, 
after the fire of 1871, several thousand homes 
were promptly erected by the municipality and 
placed at the disposal of the people. We have 
no Government provision for these emer¬ 
gencies, however, and to make such arrange¬ 
ments, suitable laws would have to be enacted. 
A like situation may never occur again. 

It is always easy to criticise public officials. 
It is a prerogative of the American people. 
Regardless of the fact that their hands may be 
tied by existing laws, we are prone to demand 
immediate action on every new problem in our 


36 





THE HOUSING SHORTAGE 


affairs, and to condemn those in office if it is 
not forthcoming. 

The varied interests of a vast country are to 
be considered and there is always the need of 
a comprehensive view. The greatest good to 
the greatest number must be the guiding prin¬ 
ciple in all governmental decisions. 

The urgency of this situation, however, is 
one that demands immediate attention. It is 
as crucial as the unemployment problem. It is 
more vital to the public welfare in that upon 
its proper solution depend far-reaching re¬ 
sults in our economic life — both as Individuals 
and as a Nation. 

* # * 

Now we are back at the beginning. 

How shall we build More Houses? 

HOW? 

“How,” do you ask? 


37 





PROSPERITY 


Why, just as you have always done. 

Why not? 

It should be easy. 

Eighty-five per cent of the cost of a house 
is the labor cost. 

Don’t dispute this statement until you learn 
the facts. It is the absolute truth. 

And you say you have an army of 5 million 
workers out of employment? 

Why not put them at work building houses ? 

“But,” you say, “the reason we can’t do this 
is because material costs are too high.” 

Very frankly and emphatically, this is not so. 
No material enters into the cost of a house that 
is not at least 85% labor. 

The market price of many of these materials 
is today as low as, and in some instances lower 
than, pre-war prices. 

You question this statement? Perhaps your 
local dealer has a stock on hand and is demand- 


38 





THE HOUSING SHORTAGE 


ing by-gone prices, unwilling to take his loss. 
Or, he may still be in the ranks of the profiteers. 
Many are in this class. They have not yet 
seen the handwriting on the wall. Exercise 
your skill as a buyer and see what can be done 
elsewhere. If you then doubt, write to the 
Department of Commerce at Washington and 
let them tell you what the real conditions are. 

The materials that enter into the construc¬ 
tion of a building are today, on the average, 
not more than 20% higher than what may be 
considered a normal increase over pre-war 
prices. 

Now, if material is only 15% of the cost of 
the house, and that is 20% higher than for¬ 
merly, your real handicap of excess cost for 
material is only 3% of the entire cost of the 
building, isn’t it? So that part of the trouble 
is insignificant. 

As to the 85% that is represented by the 


39 





PROSPERITY 


labor cost: Well, with 5 millions out of work 
in the country, surely there may be found 
enough willing workers to build what houses 
are required. 

It is not possible that a Labor Trust exists 
over the entire country, is it? 

Here and there we may find instances of 
abuse. But the United States of America, 
U. S. A., is still run on the principle of the 
open shop. The Law of Supply and Demand 
will always regulate the price of labor, just as 
it does that of any commodity; and no organ¬ 
ization can arbitrarily, effectually, or ulti¬ 
mately control it. 

The eff ort of any labor organization to alter 
this Law will never be more successful than 
was Mrs. Partington’s broom in stemming the 
tide of the Atlantic Ocean. 

If the mightiest labor leader that has yet to 
be discovered should set up his throne on the 


40 





THE HOUSING SHORTAGE 


shores of this ocean, like King Canute, to com¬ 
mand the waters to obey his will, he had better 
begin staging the performance on the ebb of 
the tide. And he should take the precaution 
to change the reel well before the turn of that 
tide — before the Waters of the Ocean of 
Public Opinion roll upon him and his cohorts. 

For these Waters will surely overwhelm 
them with disaster. 

And when the Waters recede, no trace will 
be found. 

They will have passed into Oblivion. 

Now, the problem of labor and material hav¬ 
ing been already solved by events of the past 
two years, what other difficulty can there be? 

“Well, Houses cannot be built without 
funds,” you say. “Money is needed to finance 
these operations.” 

Of course. But this should be no bar. There 
was never a time in the history of the country 


41 





PROSPERITY 


when we had so much money as we have at 
present. Surely, there is plenty of money to 
be had. 

“Yes; but the builders cannot get it.” 

Why not? 

“Because the ones that have the money ask 
so much for its use that the builders cannot 
afford to pay for it.” 

How is that? The rate for lending money 
is fixed by law, isn’t it? 

“Yes, so it is.” 

Then what does the Money Lender say? 
How can he ask more than the legal rate? 
Isn’t that an evasion of the law? Isn’t your 
security good? Or, what is the trouble? 

“He gets around the law by requiring what 
he calls a ‘bonus.’ After this bonus has been 
paid the loan costs from 20% to 28% a year 
to carry. At this rate the builder would pay 
the Money Lender in ‘interest’ alone in four 


42 





THE HOUSING SHORTAGE 


or five years as much money as the full amount 
of the loan. The builder cannot afford this.” 

But this is not Interest. 

“No, it is not interest. It is Usury. It is 
an Evasion of the Law. What can the 
builder do?” 

* * * 

So some people are paying high rents. 

Some people are doing without homes. 

* * * 

And the cost of money is the Cause of the 
Housing Shortage. 


* * * # * 


43 






4 


A NATION OF HOMES 


1 -HOME THE FOUNDATION 

2 -THE CRADLE OF PATRIOTISM 

3 -A STURDY CITIZENSHIP 

4 -THE PUBLIC WELFARE 

5 -THE HOME COMMUNITY 

6 -RENTERS AT A DISADVANTAGE 

7 - IDEALITY OF OWNERSHIP 

8 - NEED FOR MORE HOMES 

9 -A NATIONAL RESPONSIBILITY 


45 


“Economy makes happy homes and sound 
nations.” 


Georoe Washington. 


46 


4 


A NATION OF HOMES 


T HE HOME IS the foundation of 

society. 

Around the family fireside cluster all our 
earliest recollections. 

There we receive our training in First Prin¬ 
ciples in preparation for the stern realities of 
life that are to come. 

The home is the cradle of character build¬ 
ing. The lessons received there largely deter¬ 
mine the life success of the Individual and the 
hope of the Nation. 

In sentiment and in fact, Home is the 
dominating influence of our lives. 

In early settlement days every man was a 
homeseeker. Every man built a house for 


47 


PROSPERITY 


himself there to live apart with his family, 
though surrounded by neighbors. The young 
bride started housekeeping in the home her 
husband built and provided before marriage. 

Tenancy was an unknown experience. 

The sturdy characters those days produced 
are proverbial. 

The home was paramount, although insepar¬ 
able from the life of the Community and the 
State. 

Patriotism was inborn. 

The people were not rallied with brass bands 
and advertising posters to buy war bonds in 
1776, 1812, 1861, or 1898. The fife and drum 
and the display of the Nation’s flag brought 
men from field and factory to the defense of 
the country. 

With scant pay and rations, and even with 
insufficient clothing, the men of ’76 came 
through to victory. 


48 





A NATION OF HOMES 


Those of ’61, north of Mason and Dixon's 
line, terminated their army careers on a $13-a- 
month basis. And they had saved the Union. 
The wives cheerfully and patriotically main¬ 
tained themselves throughout the four years' 
struggle. 

The sacrifices of the southern soldier and the 
girl he left behind were pitiful — for he lost 
all. To his everlasting credit be it said that 
he did so uncomplainingly. 

He and his family gave their best in a spirit 
of patriotism — for love of home and country 
— and he is today no less honored in memory 
in Maine than in Georgia; nor respected less 
in Ohio than in Alabama. He was faithful 
to the traditions of his home. 

Today the home spirit is lacking. 

Patriotism is anaemic. It has become too 
much commercialized. It has been strangled 
with Profits. 


49 






PROSPERITY 


In recent years the increase of population 
has exceeded the limits of home building. 
The congestion in large cities has made it 
necessary for the people to live as “cliff 
dwellers,’’ herding together under one roof 
many separate families. 

We are fast becoming a nation of renters. 

This is contrary to early traditions and 
destructive of the fundamental principles of 
home and community life. In fact, many hold 
it to be largely accountable for the present 
unsettled mental condition of the country. 

The Secretary of the Department of Com¬ 
merce is evidently of this opinion. 

In a recent letter to a group of real estate 
men, emphasizing the need for more houses, 
he stressed the importance of the home in its 
bearing on national life and character, and 
attributed much of the unrest of today to the 


50 





A NATION OF HOMES 


lack of the early home, and home training, of 
the present generation. 

Clearly, we must get back to first principles. 

The ideal home must not only be brought 
back, but it must be brought within the reach 
of all. We cannot do this all at once, nor can 
we overcome altogether the necessities of city 
life where many workers must live in close 
proximity to their employment. But we can 
certainly accomplish much for the man that 
w^ants to make his home under advantageous 
conditions and is unable to do so because of 
some of the present deterring influences. 

It is a task that should command the sup¬ 
port of every thinking man and woman, for 
it is vital to the permanent welfare of the 
nation. Its effects will be immediate in pro¬ 
moting contentment for the present, and last¬ 
ing in years to come through the upbuilding 
of character and civic and national pride. 


51 





PROSPERITY 


The most contented part of our population 
today is that part living in the smaller com¬ 
munities — either nearby suburban or in the 
smaller towns — where detached houses are the 
rule; where the little patch of ground furnishes 
the opportunity for getting close to Nature; 
where a few vegetables may be grown; a 
flower garden cultivated; some trees planted; 
chickens, if you like; where the children may 
rejoice in the possession of rabbits or doves; 
where a dog or a cat may be kept without ask¬ 
ing permission of the janitor. 

Those are healthful surroundings; healthful 
alike to the mind and to the body. Doctors 
do not flourish there on imaginary ills, and 
anarchists are unknown. 

Such advantages should be brought within 
the reach of all so that we may become truly 
a Nation of Homes. 

As a business proposition the building of 


52 





A NATION OF HOMES 


detached houses for rental has never, even in 
normal times, paid a satisfactory return on the 
investment. Nor should such a plan be advo¬ 
cated as a remedy for present conditions. The 
fundamental idea of re-directing the thought 
of the nation toward the Home is not to be 
furthered by providing houses for rent. 

In order to inculcate sound and lasting prin¬ 
ciples of economics and a true patriotism, the 
citizen must be brought to feel the responsi¬ 
bility of ownership. 

His oath of allegiance or his birth there¬ 
under has made him a part owner of the Flag. 
He has personally become a part owner in the 
vast property that constitutes the wealth of the 
staunch Republic of which that Flag is the 
standard, or emblem. 

By the exercise of his vote he is even a 
Director in the conduct of its affairs. Auto¬ 
matically he has likewise become a part owner 


53 




PROSPERITY 


in the State and in the County in which he 
lives, as well as in the Municipality or Town¬ 
ship that contains his home. 

All these territorial subdivisions possess 
property in which he has an equal ownership 
with his neighbor. He and his neighbors are 
the directors of that property, and of the 
power of all these several governments that 
were created originally for the sole purpose of 
protecting him, his family, and his home. 
Obviously, the more property he personally 
acquires, the more protection he will need and 
the more he will seek. His interest in Govern¬ 
ment and his zeal as a Director in its affairs 
will increase in exact proportion to the need 
he feels for this protection. 

Clearly, to be a Nation of Homes, we must 
cultivate the responsibility of ownership. 

The individual or family living in a rented 
home does not feel the responsibility of owner- 


54 





A NATION OP HOMES 


ship. Seldom, even, do they entertain feelings 
of permanency, and this in itself is a primary 
cause of mental unrest not conducive to 
contentment. 

Because of this lack of permanency in the 
home location and the occasional or frequent 
moves from place to place, the feeling of pride 
and the responsibility for participation in local 
government affairs is either never developed 
or is endangered. 

The loss of the vote by the individual, even 
temporarily, is a national calamity, not only for 
the failure of the single expression by the citi¬ 
zen but from the feeling of indifference that 
may be engendered. It is well known that the 
professional politicians with their attendant 
evils of malfeasance and corruption in office 
are products of the indifference of the popular 
voter. 

When the people are aroused over some 


55 




PROSPERITY 


particularly flagrant occasion they “rise in their 
might,” as the saying is, and administer the 
proper rebuke. This is only another way of 
saying that many people are ordinarily so in- 
different to public affairs that they do not take 
the trouble to record their votes. 

We need a reversion to conditions that orig¬ 
inally existed when the vote was obligatory 
on all. The non-voters, both women and men, 
should be penalized if they wdll not come out 
voluntarily. But best of all, we should first 
endeavor to adjust conditions so that they of 
their own accord and in their own interests shall 
voluntarily come forward and assert their 
rights and Their Privileges as directors in 
THEIR Government. 

In no way can this end be achieved so satis¬ 
factorily, or so thoroughly, and for all time, as 
by bringing the possibilities of owning a per¬ 
manent home within the reach of the people. 


56 





5 


INDUSTRY AND THRIFT 


1 -SUCCESS IN LIFE 

2 -IMPORTANCE OF SAVING 

3 -THE LAW OF ACCUMULATION 

4 - NINE THRIFT RULES 

5 -THE HABIT OF THRIFT 

6 -BEGIN EARLY 

7 -A FIXED PURPOSE 

8 -ROBBING THE BANK 

9 -A PUBLIC BENEFACTOR 


57 


“Prudence plans, Economy manages, Frugality 
saves; but Thrift at once Earns and Saves, with 
a view to wholesome and profitable expenditure 
at a fitting time.” 

Fernald. 


58 


5 


INDUSTRY AND THRIFT 


E VERY ONE WANTS to be successful 
in life. 

It is a universal desire to want to make the 
most of ourselves and of our opportunities. 
This is the spirit of Ambition. 

It is the eager desire for something that we 
consider Great or Eminent, and that we look 
upon as a Worthy Prize. 

The Prizes of Ambition that we desire may 
be Advancement, Fame, Honor, or Riches. Or 
we may desire to excel in Virtue, Nobility, or 
Skill. 

Not every one aspires to become a leader. 
Nor is every one ambitious with the same in¬ 
tensity of purpose. With some Ambition is 


59 


PROSPERITY 


a wise and noble motive; with others it is 
ignoble, selfish, and sometimes it is harmful to 
others. 

With many, the thought of success in life is 
limited to ideas associated with the Accumula¬ 
tion of Money — riches. It is their sole 
thought in life; it is their one aim, and every 
effort is put forth to secure the utmost. 

On the other hand, those whose ambition 
directs their life toward the acquirement of 
Skill, Advancement, or Honor, may be neg¬ 
lectful of qualities that would insure their com¬ 
fort in declining years; this neglect may even 
subject them to privations during the period 
of their activity. 

Still others, through Lack of Application, 
Indolence, Carelessness, or Wastefulness, 
fritter away their time, money, and opportu¬ 
nities through life to no purpose, and as they 
approach its close have nothing to fall back 


60 





INDUSTRY AND THRIFT 


upon for their support. These are the 
Improvident. 

There is a happy medium between these 
extremes. 

When Industry and Thrift together are the 
guiding motives in life, fears for the future 
disappear. 

Industry is of first importance if one is to 
EARN. To SAVE is the essential habit 
taught by Thrift. WASTE is the Common 
Enemy. 

As there is a time for work and a time for 
play, so Industry must not be interpreted to 
mean continuous slavery or bondage to one’s 
tasks. 

“Industry is a habit of earnest attention to 
useful manual or mental work.” 

“Drive your business, let not your business 
drive you,” is the old saying. In other words, 
be industrious and forehanded in your business 


61 





PROSPERITY 


affairs, thoughtful in looking ahead and 
planning your work, and efficient in its 
performance. 

Thrift, the companion of Industry, saves 
and wisely spends its earnings with a prudent 
eye for the necessities of the future. 

Thrift is as careful to guard against 
excesses of miserliness for the mere sake of 
hoarding money as it is to avoid wasteful 
expenditure for unnecessary or thoughtless 
extravagances. 

Thrift has ever a watchful eye for the little 
leaks, and it diverts the flow of the family 
funds into channels that lead to Comfort and 
Abundance. 

The united efforts of the industrious hus¬ 
band and the thrifty housewife combine to 
assure Plenty for the present and a Competence 
for the future. 

Thrift never despises the day of small be- 


62 





INDUSTRY AND THRIFT 


ginnings. It commences early to save. The 
first penny saved is the first step on the road to 
Independence. The child is taught early the 
value of money and the responsibilities of 
using it. 

Thrift knows the power of money and it 
understands the Law of Accumulation. The 
tremendous forces Thrift is capable of call¬ 
ing to her assistance are not realized by those 
that do not save. Let us take a few lessons 
from her book of experience. Let us see if we 
can not discover some of her secrets. 

In the first place, it is not the easiest thing in 
the world to save money. To be prodigal is 
more natural to man than to be Thrifty. 

Industry, on the other hand, is almost an 
instinct. Men would rather work than to live 
in idleness. It is a fundamental Law of Life 
that Activity means Growth. Activity and 


63 





PROSPERITY 


Growth are inseparable. There is no develop¬ 
ment without Activity. 

But men have to acquire the habit of Thrift 
— sometimes by the teaching of others, more 
commonly through the channels of personal 
experience. Many never learn. 

We all know persons that are industrious 
hut never seem to “get ahead” in the w r orld. 
If we knew the circumstances surrounding 
these cases we should invariably find that the 
real cause is a pronounced lack of Thrift. As 
fast as they acquire money it is spent. 

Thrift is a habit. 

Thrift is an acquired principle of conduct. 

Thrift does not require superior courage, 
superior intellect, nor superior virtue. It is 
Common Sense. 

Thrift means good judgment in spending 
Time, Energy, and Money. 


64 





INDUSTRY AND THRIFT 


Here are 9 infallible Thrift rules. They 
are not secrets. They are not difficult. 

NINE THRIFT RULES 

(1) Have a Fixed Purpose 

Use your Will. Make up your mind and stick to it. 

(2) Have an Object in View 

Decide what your goal shall be. Aim high. Remember 
that your shot will land no higher than you aim. 

(3) Budget Your Expenses 

In other words, plan in advance how you will spend 
your money. 

(4) Spend Less than You Earn 


Income.$1,000 

Expenses . 900 

Savings . $100 —and Happiness! 

Expenses.$1,100 

Income. 1,000 

debt . $100 —and Worry! 


65 













PROSPERITY 


(5) Watch the Little Expenditures 

“A Small Leak will Sink a Great Ship.” 

(6) Avoid Waste 

“Wilful Waste makes Woeful Want.” Wasted Time 
means a misspent life; to “kill time” is to murder 
Eternity. Wasted money leads to Misery and Want. 

( 7 ) Contract No Debts 

Pay as you go. Neither borrow nor lend. Don’t spend 
your money before you actually get it. 

(8) Keep a Daily Expense Book 

Make the entries as you spend the money. How you 
have spent it may surprise you. 

(9) Be Industrious 

“Seest thou a man diligent in his business? He shall 
stand before kings; he shall not stand before mean men.” 

Proverbs 22:29. 

Let no man say he cannot save. There are 
few that cannot lay by something regularly. 
Some can save daily; others weekly; and some 
may prefer to lay aside their savings monthly. 
A saving of $5 weekly will amount with in- 


66 





INDUSTRY AND THRIFT 


terest in 20 years to nearly $7,000; in 25 years 

to nearly $9,500; and in 30 years to more than 

$ 12 , 000 . 

Some say they cannot save so much. Very 
well. Begin with $2, $1, 50 cents, 25 cents, a 
dime, or even a nickel. Begin somewhere. But 
at all events, BEGIN. 

Five cents a week deposited in the Postal 
Savings System will amount to $70 in 20 
years; and $125 in 30 years. 

Ten cents a week will be $140 in 20 years; 
and $250 in 30 years. 

Twenty-five cents a week will be $350 in 20 
years; and $625 in 30 years. 

Fifty cents a week will be $700 in 20 years; 
and $1,250 in 30 years. 

One dollar a week will be $1,400 in 20 years; 
and $2,500 in 30 years. 

Two dollars a week will be $2,800 in 20 
years; and $5,000 in 30 years. 


67 





PROSPERITY 


It is the HABIT of Thrift that needs to be 
formed. Get the habit. “It can't be done ” is 
the ruin of men and of nations. 

A story, familiar to many, is told of the 
farmer that led his horse to the blacksmith’s 
forge. 

“How much for shoeing this horse?” 
asked the farmer. 

“Three dollars,” said the blacksmith. 

As the farmer objected, the blacksmith 
replied, “Very well; if you think $3 is too 
much, you may pay me 1 cent for the first 
nail, 2 cents for the next, 3 cents for the 
third, 4 cents for the fourth, and so on until 
the horse is shod.” 

When the work was finished the united 
efforts of both the farmer and the black¬ 
smith were required to figure up the amount 
due. 

Both were surprised at the total of $5.28. 


68 





INDUSTRY AND THRIFT 


And as the blacksmith had no thought of 
taking advantage of the situation, the 
account was settled by payment of the 
blacksmith’s regular $3 charge. 

This old and frequently repeated story is an 
apt illustration of the power of accumulation. 
From it we may construct several lessons of 
practical value. 

Let the wage earner adopt such a plan for 
saving each month in the year. 

In the 28-day month he would save $4.06; 
in each of the four 30-day months, $4.65; and 
in each of the seven 31-day months, $4.96 — a 
total for the year of $57.38. 

Now the normal period of years of the wage 
earner’s activity is the same as the number of 
the horse-shoe nails — 32. In 32 years of con¬ 
tinuous saving on this plan there would accum¬ 
ulate, with 2 Y 2 % interest, more than $2,800. 
Forty-five million people in this broad land 


69 




PROSPERITY 


could each lay aside these small sums every 
month. Should they do so, the total of these 
comparatively insignificant amounts would 
every year be more than 2% billion dollars. 

Now, many could easily save twice these 
amounts; others three times; and some four 
times, and more. 

Suppose all these workers were to be 
grouped by earning power into four classes, 
according to what the statisticians tell us is 
the country’s real ratio. 

There would be: 

15 million workers in Class A — the ONE CENT 
Class —< earning less than $800 per year, and 
Thriftily laying aside $57.38 each year, or an 

Annual Total of. $860,700,000 

10 million workers in Class B — the TWO CENT 
Class — earning from $800 to $1,200 per year, 
and saving $104.76 each year, or an Annual 

Total of.$1,047,600,000 

10 million workers in Class C — the THREE 
CENT Class — earning from $1,200 to $1,500 


70 







INDUSTRY AND THRIFT 


per year, and saving $172.14 each year, or an 
Annual Total of.$1,721,400,000 

10 million workers in Class D — the FIVE CENT 
Class — earning more than $1,500 per year, and 
saving $286.90 each year, or an Annual Total 
of . $2,869,000,000 

The Yearly Total for the Nation would be 

$6,498,700,000 

If this total seems large, stop and consider 
that France — war torn France — saved, pro¬ 
portionately, more than twice this amount last 
year. 

Let us apply the blacksmith’s example to 
another illustration: 

Suppose at birth the parents of the child 
were to lay aside each month for the future 
benefit of the youngster a sum planned in a 
similar ratio. 

That is, for the first year, the saving would 
be one cent a day, or a total of $3.65 for the 
year. 


71 








PROSPERITY 


The second year the amount saved would be 
two cents a day, or $7.30. Added to the first 
year’s saving the total would be $10.95; to 
which would be added 12c for interest in the 
Postal Savings System making a bank ac¬ 
count that amounts to $11.07. 

For the child’s third year, the saving of three 
cents a day would be $10.95; the interest from 
the Postal Savings System would be 28c; and 
he would then have in the bank $22.30 on 
deposit in the account. During this year the 
child, if properly taught, could begin to learn 
the principles of Thrift for itself. 

A Postal Savings System card should al¬ 
ways be in the home, and as the stamps were 
purchased and affixed to the card, the tempta¬ 
tion to shake the pennies out of the tin bank 
to spend for trifles would be removed — as 
would the temptation to “rob the bank” by 
older members of the family through “borrow- 


72 





INDUSTRY AND THRIFT 


ing” larger sums that might be temporarily 
wanted for some purpose or another. 

Such little “bank robberies’’ are invariably 
committed with the best of intentions — those 
well-known paving stones of a path that too 
often leads to the utter abandonment of the 
idea of saving. The money will be replaced 
“when pay day comes.” But with the coming 
of pay day other wants or wishes present their 
claims, and not infrequently the temptation is 
too great to withstand, so the money is never 
replaced. 

To follow the child’s saving fund in its 
progress will show that when it is four years 
old the total deposits including interest will 
amount to $37.51. 

At 5 years it is $ 55.78 
At 6 years it is 79.33 
At 7 years it is 107.19 
At 8 years it is 139.47 


73 





PROSPERITY 


At 9 years it is 175.97 
At 10 years it is 216.58 
At 11 years it is 261.38 
At 12 years it is 310.79 

When the child arrives at the age of 15 years, 
the total is $497.17. 

At 20 years, there is to the credit of the 
young man or young woman the sum of 
$923.95; and at the age of 21, the sum is 
$1,028.29. 

At the age of 25, the sum has reached $1,530.99 
At the age of 28, the sum has reached 1,988.58 
At the age of 29, the sum has reached 2,157.72 
At the age of 30, the sum has reached 2,335.58 
At the age of 31, the sum has reached 2,522.43 
At the age of 32, the sum has reached 2,718.54 

Now, this sum, $2,718.54 is only a little more 
than the present individual average wealth of 
the nation. 


74 





INDUSTRY AND THRIFT 


Industry and Thrift and the Power of 
Accumulation of small sums of money were 
never more forcefully illustrated than in that 
“Cathedral of Commerce,” the Woolworth 
Building, with its 58 stories towering above the 
City of New York. It is a monument of 
Achievement. 

Probably this is the most widely known of 
any privately-owned building. The remark¬ 
able fact about the edifice is that it was con¬ 
structed by a man whose income was derived 
from profits on sales that never exceeded ten 
cents — a dime — in any single transaction! 

Talk about the Power of Money! When it 
is thriftily accumulated and concentrated in 
large sums into a new earning power for the 
people, its results may be made to surpass the 
wildest dreams of expectation. 

As ten cents make the dime, and ten dimes 


75 






PROSPERITY 


make the dollar, so the Savings of the Indi¬ 
vidual make the Wealth of the Nation. 

Thrift is necessary to Individual and Na¬ 
tional success. 

A man cannot waste his substance alone. 
The spendthrift is a public menace, for Waste¬ 
fulness by the Individual impoverishes the 
Nation. 

The thriftless man has no share in the 
progress of the world. Every thriftless person 
is a Public Enemy. 

And every Thrifty person is a Public Bene¬ 
factor. 

“Today the intoxicated man is held in aver¬ 
sion by his fellow citizens; tomorrow the person 
who is not thrifty will be a social outcast.” 


76 





6 


OWN YOUR OWN HOME 


1 -A UNIVERSAL DE8IRE 

2 -THE ONE-FAMILY HOUSE 

3 -SOME DEFINITIONS 

4 -ACQUIRING A HOME 

5 -THE COST OF OWNERSHIP 

6 - CONSERVATISM COUNSELED 

7 - CARRYING CHARGES 

8 - BUILDING-AND-LOAN ASSOCIATIONS 

9 -ENCOURAGEMENT NEEDED 


77 


“Extravagance 


is our National Curse.” 

John D. Rockefeller. 


78 


6 


OWN YOUR OWN HOME 

HE PHRASE “Own Your Own Home” 



i is a slogan frequently seen in the adver¬ 
tising literature of individuals and companies 
promoting the sales of suburban homes. 

“Own Your Own Home” appeals with great 
force to the head of every family, since it is 
unquestionably the ambition and aim of every 
home-loving man and woman ultimately to 
become possessors of a domicile they can call 
their own. This feeling is inherent. Even if 
it is restrained for a time through force of 
circumstances the idea loses none of its 
attractions. 

The appeal for home ownership is as strong 
as the family ties, and it endures throughout 
their existence. 


79 


PROSPERITY 


The idea of home ownership is usually 
accompanied by the thought of the detached 
suburban cottage with its air of freedom and 
the little patch of ground around it — an air 
of health and an opportunity for the bringing 
up of children away from the dangers and 
temptations of city streets. 

To the lover of city life where land is more 
valuable, it may mean the house in a row of 
brick or stone dwellings, with a small rear “lot” 
for an open air space. But it always implies 
the idea of ownership in a home for one 
family — as it should. 

The old New England saying that “No 
house is large enough for two families” con¬ 
tains a truth that lay at the foundation of their 
rugged development; and the saying is as true 
today as it ever was. Ideal conditions for 
family development and for the training of the 


80 





OWN YOUR OWN HOME 


young are to be found only in the advancement 
of the idea of the one-family house. 

Under present conditions of ownership, 
which may be attended with more or less finan¬ 
cial difficulty, the two-family house may have 
some advocates, and it may be thought neces¬ 
sary as a temporary expedient in order to “get 
a start.” 

“Buy a two-family house,” says the builder, 
“and let the tenant pay your rent.” This argu¬ 
ment appeals to the man that has to exercise 
economy in his expenditures. But what about 
“the other fellow?” If he is the right sort, it 
will be only a question of time before he, too, 
launches out in a home for himself. 

You face the prospect of frequent changes 
in the family that are your nearest neighbors 
and have to consider continually the desirabil¬ 
ity or undesirability of a separate family under 
your own roof. 


81 





PROSPERITY 


The two-family house is undesirable from so 
many points of view that it should not receive 
serious consideration by the home buyer. Its 
only advantage in its possibility as an income 
producer is more than offset by the serious dis¬ 
advantage and injury to the interests of your 
own home through the immediate and too close 
proximity of another family. It may be 
expedient, but it is destructive of ideals. 

Buy a house — a one-family house — within 
your means. 

* * * 

Some of the terms used in reference to home 
ownership are not always understood by per¬ 
sons that own or are considering the purchase 
of a home. To those unfamiliar with such 
transactions, a brief general description and 
some definitions may be of interest. 

The ownership of a home (that is, a House 
and Lot, Property, or Real Estate) is evi- 


82 





OWN YOUR OWN HOME 


denced by a Deed, given by the Seller to the 
Buyer. Property is said to be Free and Clear, 
or Unencumbered, when it is owned outright — 
that is, when it has been fully paid for. 

Only a relatively small proportion of homes 
are held Free and Clear. The usual prac¬ 
tice is to secure as large a Loan as possible from 
some Money Lender and give him a Mortgage 
on the property as security for the loan. It 
is customary, also, for the borrower to execute 
a Bond in double the amount of the mortgage 
in favor of the Money Lender. 

If more money is needed to complete the 
purchase, another loan is made, and another 
mortgage and bond are executed in a similar 
manner. It is customary then to refer to the 
mortgage first given as the First Mortgage, the 
other being designated as the Second Mortgage. 

If the Seller agrees to accept a part of the 
purchase price in the form of a Second Mort- 


83 




PROSPERITY 


gage, this document is sometimes called a 
Purchase-Money Mortgage. 

The remainder of the purchase price, after 
deducting the amount of both Mortgages, is 
called the owner’s Equity in the premises. 

The one that loans the money on mortgages 
is called the Mortgagee: and the borrower is the 
Mortgagor. If the mortgage is negotiated 
through the medium of a middleman, or 
broker, the latter receives a Fee for his services 
— always paid by the borrower. 

The sum exacted by the Money Lender for 
making the Loan is called a Bonus, in addition 
to which the Money Lender is paid, usually 
semi-annually, a rate of Interest for the use of 
the money. The amount of bonus exacted 
varies with the condition of the Money Market. 
When Money is Tight, or difficult to obtain, 
the amount of bonus is greater than when 
Money is Easy. 


84 





OWN YOUR OWN HOME 


Money, like any other commodity, is thus 
subject to the operation of the Law of Supply 
and Demand. 

The rate of INTEREST is fixed by State 
laws. The Lawful rate is usually 6% per 
annum. 

To loan money at rates higher than fixed by 
the State is called Usury* 

When a verbal agreement has been reached 
for the sale of a property, it is customary for 
both Buyer and Seller to sign a written form 
of Contract. This Contract specifies a subse¬ 
quent date of Title Closing which is the occasion 
for executing the final papers in the transac¬ 
tion, at which time the purchaser is said to Take 
Title. This gives the purchaser a sufficient 
time to employ a lawyer to Search the records 
to ascertain whether the Seller has a Clear 
Title, and to see that no Judgments or other 
Encumbrances are on file in the records to act 


85 





PROSPERITY 


as a Cloud against the title to the property. 
For this service the lawyer very properly 
charges an Attorney’s Fee. 

If the Buyer desires protection from possi¬ 
ble oversights on the part of the lawyer mak¬ 
ing the Search, he buys a policy of Title 
Insurance. 

The Buyer then receives his deed from the 
Seller and has it Recorded by the County Clerk 
at his office in the County Court House. 
Similarly, the Mortgage is Recorded and be¬ 
comes a Lien against the property. The sev¬ 
eral documents thus executed are sometimes 
called Indentures. 

* * * 

Much has been written on the subject of the 
value of the house one should own. No rigid 
rule can be expounded as correct or suitable 
for all cases. 

Generally speaking, it may be said that the 


86 





OWN YOUR OWN HOME 


average of various writers on the subject is 
that one-fourth of a man’s income may con¬ 
servatively be expended for rent. 

On this basis the same individual would be 
warranted in obligating himself for home 
ownership to the extent of his income for two 
years. That is to say, the average man earn¬ 
ing two thousand dollars a year could afford 
to pay a rent of $40 a month, or to own a house 
worth $4,000. These of course are average 
conditions, and they cannot be applied indis¬ 
criminately to all cases. 

The size of the family, the health of its mem¬ 
bers, the occurrence of unusual expenses, the 
necessity for the special education of children, 
these are all factors that must be considered 
before any determination can be made. 

Furthermore, these proportionate figures 
were calculated in pre-war days, and they are 


87 





PROSPERITY 


more or less affected by the conditions that 
prevail now. 

It is exceedingly doubtful whether at pres¬ 
ent, in view of the difficulty of securing mort¬ 
gage loans, a man whose income is no more 
than $2,000 a year would be able to finance a 
home that cost $4,000 unless he was fortunate 
enough to possess the greater part of this sum 
in cash. 

In their eagerness to make sales, land com¬ 
panies and builders are sometimes not careful 
to explain all the details of maintenance to the 
novice. The ownership of a home should not 
be undertaken until the full cost of upkeep is 
understood and appreciated. 

The proposition must be viewed from all 
angles so that every phase of cost may be 
known. Otherwise the prospective home owner 
may find himself in the deep waters of financial 


88 




OWN YOUR OWN HOME 


difficulty, and ultimately he may lose his nest- 
egg of investment. 

Conservatism should be uppermost in his 
mind. A serious mistake may be made through 
the purchase of a home beyond one’s means. It 
is far better to buy a home that is perhaps 
under the ability to “carry” than it is to assume 
a burden of extravagance, or one that is going 
to be a source of worry over a period of years. 

A few calculations will illustrate the cost of 
financing a small home under various condi¬ 
tions. 

A typical example in the case of a home that 
sells for $4,000 may help to make clear the 
method of computing the usual carrying 
charges. The annual charges that must be paid 
consist of four principal items: 

(1) Taxes 

(2) Water Rent 


89 





PROSPERITY . 


(3) Insurance 

(4) Repairs 

If the family has previously been living in a 
steam-heated apartment, the coal problem will 
have to be confronted when residence is taken 
up in a one-family house. This is an item of 
cost frequently overlooked in calculating the 
annual expense. While it is no part of the 
so-called carrying charges of a house, it may 
introduce a new element of expense into the 
family budget. 

In addition to the four items first enumer¬ 
ated, that are always considered, there is the 
liability for contemplated special local assess¬ 
ments that must be investigated. 

Assessments may be levied for sidewalks, 
sewers, street improvements, or other municipal 
expenditures, the cost of which may become a 
lien on the property and involve payments to 
considerable amount over a term of years. 


90 




OWN YOUR OWN HOME 


All these improvements, of course, while 
they add to the value of the property, may be 
levied at a time when their payment will be 
burdensome to the owner. 

A fair estimate of the cost of the four prin¬ 
cipal items in the case of a $4,000 house is: 

Example 1 


(1) Taxes. $90. 

(2) Water. 20. 

(3) Insurance. 4. 

(4) Repairs ( 2 %) . 80. 

Total.$194. 


or an average per month of $16.17. 

If the prospective home owner is fortunate 
enough to possess the full amount of cash in 
the savings bank — where it is probably draw¬ 
ing interest at the rate of 3 3^ % — he can pay 
for the house outright and include the cost of 


91 











PROSPERITY 


the interest he would lose by the withdrawal of 
funds from the bank. 

The home would then be occupied at an 
annual cost of: 


Example 2 


Interest on $4000 @ Zy 2 % .$140. 

Carrying Charges as in Example 1. 194. 

Total.$334. 


or an average per month of $27.83. 

It will be understood that the owner’s cash 
outlay in this example is the same as in 
Example 1 . He does not, of course, pay out 
cash for the interest, since the $4,000 was his 
own money. But because it is invested in the 
house, and no longer in the bank to draw inter¬ 
est, the house owner thereby loses $140. This 
amount, therefore, must be reckoned as a part 
of the cost of occupancy. 


92 









OWN YOUR OWN HOME 


Few individuals, however, are fortunate in 
the possession of enough cash thus to be able 
to own their homes “free and clear” of mort¬ 
gage encumbrance. 

They have to borrow as much money on 
“first mortgage” as they can secure. 

Let us see what this adds to the cost, and 
how much cash will be needed. If it is found 
that only 60% of the value of the house, or 
property, can be borrowed — or $ 2,400 — the 
owner will need $1,600 in cash. 

He will then have to pay interest on $2,400 
at the rate of 6%, or $144 per year. Besides, 
he will have to pay a “bonus” for securing the 
loan of at least 2%%, or $60. He may have 
to pay much more for the bonus, since this 
commodity has recently become very popular 
with Money Lenders . 

The money is usually borrowed for a 3-year 


93 





PROSPERITY 


term, so that the cost of the bonus may be 
proportioned over this period of time. In the 
case of a $60 bonus, therefore, the annual cost 
is $20. 

Fees for Attorney’s charges for Search, etc., 
may amount to a total of another $60. This 
charge is likewise spread over the 3-year period, 
and constitutes a further annual cost of $20. 

If, then, the home owner has an Equity of 
$1,600 in the house, the Equity Statement will 
appear as follows: 


Example 3 


Equity (Amount paid in Cash).$1,600. 

Amount of First Mortgage. 2,400. 

Total Value of House.$4,000. 


94 









OWN YOUR OWN HOME 


The annual cost for occupying the house, 
then, would be as follows: 

Example 4 

Interest on Equity of $1,600 @ 3 1 / 2 % $56. 

Interest on First Mortgage of $2,400@6% 144. 

Annual pro-rata of Bonus. 20. 

Annual pro-rata of Attorney’s Fees. 20. 

Carrying Charges as in Example 1. 194. 

Total Annual Cost.$434. 

or an average per month of $36.17. 

In this case the owner's actual cash outlay is 
$31.50 per month; the interest loss is $4.67. 

But even the sum of $1,600 is not carried in 
the bank by every prospective home buyer. 

Inducements to would-be home owners that 
have not sufficient cash to pay for the Equity 
over the First Mortgage are frequently made 
by builders who will sometimes agree to sell on 
what are called “easy terms” They will often 


95 










PROSPERITY 


accept a payment of as little as 10% of the 
Purchase Price. 

Then they “take back” a so-called “Purchase 
Money” second mortgage for the difference. 
This mortgage usually bears interest at the 
rate of 6%, and provides for installment pay¬ 
ments of a part of the principal, throughout a 
period of three or more years. These payments 
are made monthly, quarterly, or semi-annually 
as arranged. 

In the case of a purchase with a 10% Cash 
Payment, and the giving of a Purchase 
Money, or Second, Mortgage for the differ¬ 
ence, with equal installment payments arranged 
over a period of 3 years, the Equity Statement 
at the outset would be as follows: 


Example 5 

Equity (Amount paid in Cash). $400. 

Amount of First Mortgage. 2,400. 

Amount of Second Mortgage. 1,200. 


Total Value of House.$4,000. 


96 










OWN YOUR OWN HOME 


The annual cost for occupying the house, 
then, would be as follows: 

Example 6 

Interest on Equity of $400 @ 3y 2 %. $14. 

Interest on First Mortgage of $2,400@6% 144. 
Interest on Second Mortgage of $1200@6% 72. 

Annual pro-rata of Bonus. 20. 

Annual pro-rata of Attorney’s Fees. 20. 

Carrying Charges as in Example 1. 194. 

$464. 

To this must be added the annual total 

of the installment payments. 400. 

(which must be continued for 3 years) - 

Total Annual Cost.$864. 

or an average per month of $72. 

In this case the owner’s actual cash outlay is 
$70.83 per month; the interest loss is $1.17. 

This monthly payment of $70.83 continues 
for 3 years in order to meet the installment 
payments required for the Second Mortgage. 
At the end of 3 years, when the Second Mort- 


97 













PROSPERITY 


gage has been paid off, the cost of carrying 
the house is $36.17 each month, as shown in 
j Example 4. The owner’s Equity then becomes 
the same as shown in Example 3. 

Now, $70.83 for the purpose of home acquisi¬ 
tion is a large amount to set aside each month 
from a $40-a-week income. Of course there is 
no further rent to pay; but unless one can be 
sure of saving this amount, it is the height of 
folly to undertake such a debt. 

True, it is just the same as if he paid $40 a 
month for rent and put $30.83 in the bank. If 
the individual is sure he can do this, he should 
by all means buy the house — and the sooner, 
the better. 

He should not be misled, however, into tak¬ 
ing a house with a Second Mortgage on any 
other plan than that of installment payments 


98 





OWN YOUR OWN HOME 


that will pay off the mortgage within a definite 
time. 

As a rule, Second Mortgages are not con¬ 
sidered desirable investments, and Money 
Lenders that deal in them are not philanthrop¬ 
ists. When it becomes necessary for a house 
owner to renew a Second Mortgage, it is not 
unusual for the Money Lender to exact an 
annual bonus of 20%, or of 25%, and some¬ 
times even more, for extending the loan. This 
is in addition to the regular 6% interest charge. 

The plan of Building-and-Loan Associa¬ 
tions is somewhat more liberal than that of 
regular Mortgage Institutions, Savings Banks, 
or even of individuals. 

Under the building-and-loan plan it is often 
possible to secure 75% of the value of the 
property on a first mortgage. Payments are 
made monthly, and they include not only the 


99 





PROSPERITY 


interest charge but a partial payment on the 
principal. The plan is so formulated that full 
payment of the mortgage is made in something 
less than 12 years. 

Building-and-Loan Associations are mutual 
profit-sharing institutions in which the bor¬ 
rower benefits to the extent of his share of the 
earnings. 

To secure a building-and-loan First Mort¬ 
gage of 75% on a $4,000 house property, the 
owner will need $1,000 in cash. Under these 
conditions the Equity Statement would be as 
follows: 


Example 7 

Equity (Amount paid in Cash).$1,000. 

Amount of Building-and-Loan First 
Mortgage. 3,000. 

Total Value of House.$4,000. 


100 









OWN YOUR OWN HOME 


The annual cost for occupying the house, 
then, would be as follows: 

Example 8 


Interest on Equity of $1000 @ Zy 2 % . $35. 

Building-and-Loan Payments 
(@ $42.50 per month). 510. 

Carrying Charges as in Example 1. 194. 

Total Annual Cost.$739. 


or an average per month of $61.59. 

In this case the owner’s actual cash outlay is 
$58.92 per month; the interest loss is $2.67. 

It must be remembered, however, that the 
Building-and-Loan payments cease after 12 
years and that the home is then “free and 
clear,” after which its cost for occupancy is as 
shown in Example 1. 

During the period in which the monthly cost, 


101 










PROSPERITY 


inclusive of Building-and-Loan payments, is 
$58.92, therefore, the home owner is actually 
paying off this mortgage. To be exact, the 
sum of $20 each month applies on this prin¬ 
cipal. So that the effect is the same as if 
$38.92 were expended for rent monthly and 
$20 put in the Savings Bank. 

Now, let us consider the present adverse 
conditions. 

Few realize the home owner’s burden. 

Today the individual that buys a home and 
has to depend on Money Lenders for the neces¬ 
sary Mortgage Loans with which to make the 
greater part of his purchase, ties a financial 
mill-stone around his neck. 

Suppose a home owner buys a $4,000 house, 
which is to be encumbered with a $2,400 First 
Mortgage. In addition to this he finds it neces¬ 
sary to secure a Second Mortgage of $1,000. 


102 





OWN YOUR OWN HOME 


A bonus of 15% may be charged for the 
First Mortgage loan, and a 20% bonus for the 
second Mortgage loan. Since the First Mort¬ 
gage is usually for a 3-year period, and the 
Second Mortgage for one year, the annual 
20% bonus on the Second Mortgage is an im¬ 
portant factor in the transaction. Yet Money 
Lenders argue that these bonuses are reason¬ 
able. Many charge more. 

Under conditions just described, the Equity 
Statement would be as follows: 


Example 9 


Equity (Amount paid in Cash). $600. 

Amount of First Mortgage. 2,400. 

Amount of Second Mortgage. 1,000. 

Total Value of House.$4,000. 


103 










PROSPERITY 


The annual cost for occupying the house, 
then, would be as follows: 

Example 10 

Interest on Owner’s Equity of $600@3Vfe% $21. 
Interest on First Mortgage of 2,400@6% 144. 

I nterest on Second Mortgage of 1,000@6% 60. 


Bonus on First Mortgage for 3 years. 120. 

(15% bonus on $2,400 = $360 
1-3 of $360 = $120 annual charge) 

Bonus on Second Mortgage... .$200. 

(20% on $1,000 = $200) 


Attorney’s Fees for 3-Year First Mortgage 20. 
(1-3 of $60 = $20 as in Example 4) 

Attorney’s Fees for 1-year Second Mortgage 40. 


Carrying Charges as in Example 1. 194. 

Total Annual Cost.$799. 


or an average per month of $66.59. 

In this case the owner’s actual cash outlay is 
$64.84 per month; the interest loss is $1.75. 

Of course, this cost is prohibitive. 

Remember that the Examples here given are 
based on the purchase of a $4,000 house by 


104 










OWN YOUR OWN HOME 


a man earning $40 a week. The same 
proportionate cost applies to more expensive 
dwellings. 

When you consider that under the conditions 
of financing outlined there is no provision for 
refunding the mortgage, it is evident that the 
Ownership of a Home is beyond the reach of 
the average individual. 

That industrious, thrifty men and women, 
with ideals and ambitions for a Home should 
be frustrated by such disheartening and para¬ 
lyzing extortions is a national scandal. 

Nor is the situation mitigated or palliated by 
the fact that these exactions are not only 
countenanced but practiced by men of high 
standing in their communities. 

Such conditions will never lead or induce the 
people to become home owners. Possession is 
a luxury few can afford. 

To be burdened with a load of debt under 


105 





PROSPERITY 


these circumstances, and to feel that it is to 
continue indefinitely, is indeed discouraging. 

It is hopeless. 

The injustice of the burden is not only 
keenly felt, but there is the added mental dis¬ 
turbance of the thought that even higher 
bonuses may be demanded if money should 
continue 4 ‘scarce.” 

Relief can be found only in a sale to some 
fortunate individual in possession of enough 
cash to be able to carry the house free and clear 
or with a smaller mortgage burden. 

Encouragement must be given to the pros¬ 
pective home buyer if we are to become A 
Nation of Homes. The difficulties at present 
are too great. The number of people now able 
to purchase a home and pay for it free-and- 
clear, or even down to a first mortgage, is 
negligible. 

Every assistance should be given to the home 


100 





OWN YOUR OWN HOME 


buyer, and to the owner struggling along 
under a load of mortgage debt. He should 
have this financial help at the lowest economic 
cost. No fictitious or illegitimate charges 
should be permitted. 

To make home buying easy is necessary not 
only to the welfare of the individual and his 
family, but it is vital to the interests and life 
of the nation. 

The press is already calling attention to 
existing abuses in loan methods, and a few pub¬ 
lic spirited citizens are outspoken in denouncing 
these corrupt practices. 

The remedy is at hand. 

Its application is simple. 

There is no suggestion either of charity or 
of philanthropy in its adoption. 

It is, after all, the people’s money. 

Let us bring its use within their reach. 


107 





PROSPERITY 


HOW SHALL IT BE DONE? 


* * * 


108 





7 


PROBLEMS OF HOME MORTGAGE 
FINANCING 


1 THE HOME OWNER'S DREAD 

2 "CALLING” THE MORTGAGE 

3 -THE SCARCITY OF MONEY 

4 -WHO IS TO BLAME 

5 -THE BANKERS* FORMULA 

6 -PASSING THE BUCK 

7 -THE WORTH OF MONEY 

8 -LOANS AT ECONOMIC WORTH 

9 -A GILT EDGE SECURITY 


109 


4 ‘All the world cries, ‘Where is the man who 
will save us? Who will lead us to Prosperity? 
Where is the man?' 

Do not look so far for this man: You have 
him at hand. This man — it is YOU, it is I, it 
is each one of us.” 

With apologies to Dumas. 


110 


7 


PROBLEMS OF HOME MORTGAGE 
FINANCING 



HE OWNER of a home on which a 


X mortgage is carried is faced with the ever¬ 
present dread of what the mortgagee will 
require on the date of mortgage maturity. 

Formerly it was the custom of Savings 
Banks to make loans on first mortgage for a 
period of three years, at the end of which time 
the mortgage was neither “called” nor formally 
renewed — it was allowed to run as an “open” 
mortgage. 

It was always the privilege of the bank to 
call the mortgage (i.e., to demand its pay¬ 
ment) at the time of any interest period; but 
giving the house owner six months in which to 
secure another mortgage loan. Mortgages 


111 


PROSPERITY 


were seldom called, however, and many ran as 
“open” undisturbed for long periods. 

Of late, this practice has not been so com¬ 
mon. Bankers have learned the profitable 
character of the “Bonus,” to the home owner’s 
exceeding discomfiture. 

Mortgage-renewal dates are dreaded occa¬ 
sions. They may come at a time when the 
owner is obliged to face an unexpected bonus 
demand; when he can ill afford the additional 
expenditure; and it may cause him serious in¬ 
convenience. The thought of being caught in 
such an emergency continually oppresses him. 
He is apprehensive of the possible loss of his 
home through inability to secure funds when 
needed. 

Just what causes “scarcity of money ■” is an 
economic question that has brought forward a 
variety of explanations. 

Prominent business men of the country have 


112 





PROBLEMS OF HOME MORTGAGE FINANCING 


been loud in their denunciation of the bankers 
as being responsible because of the manner in 
which they have exercised control of affairs. 
The bankers themselves promptly “pass the 
buck” by saying that it is due to “abnormal 
conditions ” Economists say that it is caused 
by the “instability of the dollar ” 

To the general public it is left to choose be¬ 
tween these statements, with a tendency to 
place the blame on the bankers. 

Possibly this is because we feel justified in 
holding them responsible when anything goes 
wrong in the particular field of Money and 
Finance, these being the subjects of the bank¬ 
ers’ special vocation and profession — just as 
we blame the weather-man when his predictions 
go awry. 

It is quite possible that bankers , like the 
weather-man, really have some percentage of 
error in their calculations; but it is altogether 


118 




PROSPERITY 


probable that other influences quite beyond 
their control have not been wholly lacking. 

One of these causes may be due to their hav¬ 
ing had too much money to manipulate. 

By their own definition it takes a BIG man 
to be a banker. 

They admit it. 

The formula expounded at one of their re¬ 
cent conventions — that the banker should be 
one-fifth accountant, two-fifths lawyer, three- 
fifths economist, and four-fifths gentleman and 
scholar: total, ten-fifths, or double size — 
calls for a man of somewhat unusual qualifica¬ 
tions and attainments. 

If the banker always lived up to his ideals, or 
to the ideals he collectively flaunts, doubtless 
some present causes of complaint would not 
exist. 

But none of us live up to our ideals; and 
maybe, after all, the banker is only human. 


114 





PROBLEMS OF HOME MORTGAGE FINANCING 


Perhaps the funds of the country have be¬ 
come too largely centralized; they may be con¬ 
centrated in the power of an interest, or of a 
group of interests, that fails to see, or deliber¬ 
ately ignores, the harm that follows misdirec¬ 
tion. 


If this is the malady, the cure is to re-direct 
the flow of money. 


Merely to transfer the money from the 
hands of one group to another set of financial 
interests, if that could be done, would not avail. 

Such a solution would offer no advantage. 

A way must be found to remedy the “money 
scarcity” permanently. 

The present financial fabric must not be dis- 


115 





PROSPERITY 


rupted; but in some way equal rights and 
equal benefits must be ensured to all. 

Home Mortgage Financing must be freed 
from burdensome restrictions. 

To become A Nation of Homes, it must be 
made possible to obtain homes; assured of this, 
it must be made easy to retain homes. 

If money is worth only 2% or 3%, as 
economists contend 

BY ALL MEANS LET 
US HAVE HOME MORT¬ 
GAGE LOANS FOR THE 
PEOPLE AT THIS RATE 


116 





PROBLEMS OF HOME MORTGAGE FINANCING 


No better security can be found than the 
Home of the Working man . 

He will lay down his life in protecting it; he 
and his family will use every endeavor to retain 
possession of it. 

To the whole family it has a value in senti¬ 
ment exceeding any intrinsic estimate or ap¬ 
praisal that may be set by another. 

A First Mortgage HOME LOAN, there¬ 
fore, is a Gilt-Edge Security. 

Notwithstanding these known and acknowl¬ 
edged facts, Money Lenders have been guilty 
of a degree of extortion that has made it prac¬ 
tically impossible the past few years for 
enough houses to be built to supply the 
demand. 

Although costs of construction have been 
decreasing, building operations over the coun¬ 
try have been checked by inordinate bonus 
demands. 


117 





PROSPERITY 


The reports of legislative committees have 
directed attention to instances where such rates 
have been as high as 20% and even 28%. 

Official confirmation is not lacking. 

In times like these it is inconceivable that 
such an attitude can be assumed. Yet these 
are the incontrovertible facts . 

Such a system is vicious. 

It should not be tolerated. 

It can be corrected. 


WHAT IS THE WAY OUT? 

* * * * * 


118 





8 


THE SOLUTION 

1 -THE POSTAL SAVINGS SYSTEM 

2 -THE PLAN 

3 -THE EXTENT 

4 -THE STRENGTH OF THE GOVERNMENT 

5 -NEW ZEALAND 

6 -UNITED STATES POSSIBILITIES 

7 - 3 % HOME MORTGAGES 

8 -AN ADVERTISING CAMPAIGN 

9 -THE HOUSING SHORTAGE ELIMINATED 

10 -EXTENSION OF POSTAL SAVINGS OFFICES 

11 -A NATION-WIDE THRIFT CAMPAIGN 

12 THE BORROWER'S CHARACTER 

13 LOCAL APPRAISAL 

14 -GOVERNING SALES 

15 -THE TORRENS LAW 

16 -85% MORTGAGES 

17 -THE REFUNDING PLAN 

18 -THE FREE-AND-CLEAR HOME 


119 


I AM THE BANK ACCOUNT 


Born of Trial and Self-Denial; my father it 
Industry and my mother Thrift. 

Fostered by Foresight, I grow faster and faster, 
and Prosperity of men and women, the farm and 
factory, of towns and nations grow with me. 

I am the Father of Riches, and Credit is my 
Son. 

From me spring all great undertakings; with 
my help trade flourishes, homes are built, schools 
maintained; without Me hospitals and churches 
could not do their work. 

I hold the Dogs of War in leash, and further 
the acts of Peace. 

Ease and Increase are my fellows; Harmony 
and Happiness follow my train. 

I AM THE BANK ACCOUNT 

Mac Geegoe. 


120 


8 


THE SOLUTION 


C OMPARATIVELY FEW people are 
familiar with that Government Institu¬ 
tion known as the Postal Savings System. 

It has been established in the United States 
only a little more than 10 years, but its origin 
abroad was much earlier. 

It is designed, primarily, to be the people's 
bank, and the convenience with which it may 
be used will be seen from the following ex¬ 
planation of the plan. 

Anyone over 10 years old may open an ac¬ 
count, but no account may be opened for less 
than $1. Fractions of $1 are not accepted for 
deposit. Postal Savings Stamps for amounts 
less than $1 may be purchased, however, and 


121 


PROSPERITY 


the Department supplies a card to which they 
can be affixed until $1 has been accumulated. 
At that time the card will be received as a 
deposit in the regular account, or it may be 
used to open an account. 

Regular Postage Stamps are not available 
for use in Postal Savings, nor may the Postal 
Savings Stamps be used for postage. 

Deposits are limited to the amount of $2,500, 
any part or all of which may be deposited in 
any one month. 

The deposits in the Postal Savings System 
are evidenced by Postal Savings Certificates, 
issued in denominations of $1, $2, $5, $10, $20, 
$50, $100, $200, and $500. These Certificates 
bear interest at the rate of 2%. 

By applying for them 30 days in advance, 
depositors may exchange the whole or any part 
of their deposits on January 1 or July 1 of 
each year for 20-year United States Gold 


122 






THE SOLUTION 


Bonds — either Registered or Coupon — in 
denominations of $20, $100, or $500, bearing 
interest at the rate of 2%%. 

The interest on these bonds is payable semi¬ 
annually. The bonds are redeemable by the 
Government at its option after one year from 
the date of issue. 

Both Principal and Interest are payable in 
United States Gold Coin. 

* * * 

The present total of deposits in the United 
States Postal Savings System is more than 
150 million dollars. 

* * * 

That Postal Savings Banks are popular in 
foreign countries, the following table of aver- 


123 





PROSPERITY 


age deposits per capita of population will 
indicate: 


$ 4.95 


Canada . 

Franee . 

Holland . 

Italy . 

New Zealand. 

United Kingdom ... 
United States. 


8.07 

12.84 

11.82 

129.40 

21.92 

1.41 


These Banks are popular abroad because of 
their known strength — the government is 
back of them. It is easy, too, to open or with¬ 
draw an account. 

A large proportion of our depositors are 
foreigners who were familiar with their own 
Postal Savings Banks at home, and they be¬ 
lieve in the strength of our Government sys¬ 
tem here. 

The Postal Savings System has been too 


124 











THE SOLUTION 


little advertised to the general public here, and 
very few know of its convenience. 

In order that the reader may become some¬ 
what familiar with the present plan of the 
Postal Savings System, a sample of the reg¬ 
ular form of Postal Savings Card is bound 
with this book. 

The front of the Card is imprinted with 
spaces in which 10 Postal Savings Stamps are 
to be affixed. When each of these spaces has 
been filled with 10-cent Postal Savings Stamps 
— the only denomination in which they are at 
present to be obtained — the card will be ac¬ 
cepted as a deposit of $1. Or, it may be 
redeemed in cash. 

On the back of the Card it is stated that 
“The faith of the United States is solemnly 
pledged to payment of deposits , with 2% 
interest annually ” 

This Pledge is printed in 24 different 


125 





PROSPERITY 


languages, including Chinese and Japanese. 

Each of the spaces for the stamps is num¬ 
bered, and each space contains a brief “Thrift” 
proverb. 

A 10-cent Postal Savings Stamp has been 
affixed in the first space so that the reader may 
make his beginning as a Postal Savings Sys¬ 
tem Depositor. When 9 more Stamps have 
been affixed the Card is ready for deposit; it 
may be easily detached from the book. 

Additional cards may be obtained without 
charge at any Post Office where a Postal Sav¬ 
ings Depository is in operation. 

Some idea of the 'possibilities for growth in 
the United States may be had by comparing 
the figures given for New Zealand with the 
population and wealth of that country, and 
making a similar analysis of the same condi¬ 
tions here. 

In proportion to the population and wealth 


126 





THE SOLUTION 


of the two countries, should our Postal Sav¬ 
ings deposits be brought to the New Zealand 
ratio, we would have available a fund of more 
than eighteen billion dollars!! 

That a proper campaign of publicity would 
effect such a result may be considered alto¬ 
gether probable if we compare the success of 
the Liberty Loan investments made by the 
general public. 

Two million railway employes purchased 
and paid for $600,000,000 worth of bonds in 
20 months — or at the rate of $360,000,000 per 
year. At this rate 20 million workers in the 
country would create a balance of deposits in 
1 year of 3*/2 billion dollars! 

Yet each worker would need to deposit only 
$15 per month to accumulate this fund. And 
there are other depositors to be obtained among 
the remaining 90 million people of the country! 

It has recently been suggested that the 


127 




PROSPERITY 


Government increase the rate of interest paid 
on deposits by the Postal Savings System in 
order to make it more popular. 

The suggestion has not been received with 
favor by the Savings Banks, and at the last 
Bankers’ Convention (1921) the subject was 
discussed and resolutions were adopted de¬ 
nouncing the idea. 

It would seem as if the present rates of in¬ 
terest paid by the Postal Savings System — 
2% and 2%% — established as they are on 
what economists have practically agreed is the 
true worth of money loaned on unquestioned 
security, are right. 

They are correct for an indefinite period. 

The present emergency is temporary and 
will disappear within a comparatively short 
time. On the return to normal conditions, 
incalculable harm might result to the country 
if occasion then required a lowering of the rate. 


128 





THE SOLUTION 


We should remember that it is not so many 
years since 2% Government Bonds sold above 
par — and it may not be so long before we 
again see the same occurrence! 

* * * 

We suggest that the Government 
adopt a plan by which the funds of 
the POSTAL SAVINGS SYSTEM 
may be employed to provide popular 
Home Mortgage Loans at a rate of 
interest not to exceed 3 % per annum. 

* * 

Embodied in this suggestion is the 
further plan of providing also for re¬ 
payment of these Home Mortgage 
Loans on a long-term basis. 

* * 


129 





PROSPERITY 


If the Government were to make these 
loans to home owners on the basis of a 
charge of $2 per month per $1,000 for 
interest, the equivalent annual rate would 
be 2.4%. 

If to this interest charge of $2 is added 
a charge of $4 per month FOR RE¬ 
FUNDING, the loan would be paid off in 
a little more than eighteen years. 

By requiring these monthly payments 
of $6 per $1,000 to be continued for 20 
years the net return to the Government 
would be almost exactly 3%. 

Since the Government now pays De¬ 
positors in the POSTAL SAVINGS SYS¬ 
TEM 2% and 2 1 /2%> this additional Vz% 
or 1% (or the difference between the in¬ 
terest PAID depositors and that RE^ 
CEIVED from the Home Mortgage 
Loans) would probably just about defray 
the additional clerical cost of conducting 
the loan proceedings. 


130 





THE SOLUTION 


By establishing the monthly refunding 
payment at $3 per $1,000 (in place of 
$4 per $1,000), and requiring total 
monthly payments of $5 per $1,000 (in 
place of $6 per $1,000) to be continued 
over a period of 25 years, the net return 
to the Government would be slightly 
greater than the plan first suggested. The 
monthly burden on the home owner by 
the latter alternative would also be 
slightly relieved. 


* * * 


Such a plan could be put into immediate 
operation. 

The present fund of 150 million dollars 
would provide 50,000 Home Mortgage Loans 
averaging $3,000. 

The monthly payments on such loans would, 
in themselves, produce returns to the treasury 


131 





PROSPERITY 


of $900,000 per month, all of which could 
undoubtedly be diverted into new loans. 

It would be necessary merely to maintain a 
conservative balance against normal with¬ 
drawals. The present ratio of deposits prac¬ 
tically does this now. 

An intensive campaign for advertising 
the Postal Savings System should be inaug¬ 
urated. 

Once it is generally known that Home Mort¬ 
gage Loans are obtainable at an interest rate 
of 3%, and without the requirement of a 
“bonus,” it is safe to predict that a material 
expansion of deposits will occur. 

There is no reason why this country should 
not equal or even exceed the ratio of deposits 
now prevailing in New Zealand. 

With such a direct and immediate advan¬ 
tage to the country as would obtain through 
the use of the funds as here suggested, the 


132 





THE SOLUTION 


gain in popularity would be spontaneous. 

Thoughtful parents might anticipate the 
future needs of their children by directing and 
diverting the child’s savings during the period 
of his growth into the Postal Savings System 
in anticipation of the Home that child may 
one day own. A saving of but 5 cents a day 
would accomplish this. 

Five Cents a day deposited in the Postal 
Savings System would establish a fund by the 
time of his probable marriage sufficient to pay 
on a home all that would be needed over and 
above what he would be able to obtain on a 
Postal Savings System Home Mortgage 
Loan. 

And the aggregate fund from the 20 million 
children of the country thus deposited would 
be $365,000,000 yearly — or enough to finance 

A Hundred Thousand new homes annually. 

Such savings, trivial in themselves and rela- 


133 





PROSPERITY 


tively insignificant at the time, redound to the 
ultimate and appreciable benefit of the indi¬ 
vidual only after a comparatively long period. 
At their maturity, however, as in the case of 
Endowment Life Insurance, a considerable 
sum is available. This sum is enough, perhaps, 
for a start in business, for a marriage portion, 
for a college education, or for the purchase 
of a home. 

The powerful factor for the present is the 
accumulation in one large fund of these small 
savings. “Many a Little Makes a Muchle” 
the old Scotch saying goes, and this “muckle” 
rightly applied may be made to develop a 
tremendous power in our economic life. 

This tremendous power contains the possi¬ 
bilities for solving many of the difficulties that 
are at the root of our present unrest and 
stagnation. 

At present the funds of the Postal Savings 


134 






THE SOLUTION 


System are deposited by the United States in 
various National Banks. 

These banks have qualified, of course, in 
accordance with the customary procedure. 
They have deposited with the Government as 
security for the money certain bonds which 
they own. 

In return for these deposits, and for the use 
of the money, the Banks pay the Postal Sav¬ 
ings System interest at the rate of 2%% per 
annum. 

This is an interesting side-light on the man¬ 
ner in which banking profits are accumulated. 

The clever banker borrows the money at 
2%%• He loans the money, legally, at 6%. 

So that, aside from the advantage he may 
secure from a “bonus,” he has a profit of 
3y 2 % on the transaction. 

On the comparatively small sum now on 
deposit in the Postal Savings System, this 


135 





PROSPERITY 


interest loss to the people is more than 
$5,000,000 a year. 

Were the Postal Sayings System deposits 
of the United States as great as the New 
Zealand ratio, the interest loss would be more 
than enough to pay the entire interest on the 
Government debt, inclusive of all the Liberty 
and Victory Bonds. 

There is, therefore, now going into the pri¬ 
vate cofFers of the bankers, interest that might 
otherwise accrue to the public welfare in a way 
that would materially affect the present rate 
of taxation. 

A way in which these burdens could be light¬ 
ened is not difficult to determine. 

Just a little lesson in National Thrift, isn't it? 

Let the press, our magazine writers, the 
clever poster artists, and the ad-writers of the 
country, all of whom distinguished themselves 
so splendidly in the exploitation of Liberty 


136 





THE SOLUTION 


Bonds, direct their energies toward the subject 
of Thrift, of Saving, and of the United States 
Postal Savings System. 

When these w r ords are written in “letters of 
gold across the shy” from the Atlantic to the 
Pacific, we shall find that all the funds needed 
for the requirements of Home Mortgage 
Loans will be available. Further than this, a 
substantial surplus will be left for other uses, 
for some of which we are now paying too 
dearly. 

Then we shall hear no more of the “housing 
shortage.” 


* 


To put into practical operation the plan for 
Home Mortgage Loans by the United States 
Postal Savings System, it would be neces- 


137 





PROSPERITY 


sary, of course, to authorize every existing 
Post Office to receive deposits. 

In order to simplify matters for the third- 
and fourth-class offices, some modifications of 
present methods might be desirable, but the 
System should be extended without any re¬ 
strictions to every office in the country. 

A comprehensive advertising campaign 
should be inaugurated to bring the full work¬ 
ing of the plan before every man, woman and 
child in the entire country. 

Full particulars of the System should be on 
cards enclosed in frames covered by glass dis¬ 
played in every Post Office and in every Pub¬ 
lic School and Library in the land. 

Appropriate decorative posters on the gen¬ 
eral subject of Thrift and of Home Owner¬ 
ship should be displayed everywhere. They 
should be constantly before the public. 

The frequency with which the eye now en- 


138 





THE SOLUTION 


counters attractive posters used by the recruit¬ 
ing stations for the Army and Navy should be 
equaled or even surpassed in the effort to 
advertise in the same manner the advantages 
of Thrift and Saving. 

Attractive booklets, pocket size, fully de¬ 
scriptive of the plan should be placed in the 
hands of every child of school age in the 
country. Similarly, they should be left in 
every home served by letter-carriers, and placed 
in every mail-box in city and country Post 
Offices, as well as on rural free-delivery routes. 
In this way every woman of the country will 
be reached. 

It is to the women particularly that such an 
opportunity will present a strong appeal, and 
their influence in extending and aiding its 
success should be enlisted and encouraged to 
the utmost. 

Let us not forget that it was a WOMAN 


139 




PROSPERITY 


that first conceived the “savings bank” idea . 

The opportunity to convey to the public 
mind the principles of saving, economyhome¬ 
trainingnational pride and patriotism that is 
made possible by such a campaign should be 
utilized to the fullest extent. 

A regular annual appropriation for this pur¬ 
pose should be made. 

Spasmodic advertising at irregular intervals 
should not be countenanced. 

Plans should be made to change the text and 
appearance of the advertising with sufficient 
frequency to attract and hold attention, and at 
the same time emphasize some new and trucu¬ 
lent truth it is desired to stress. 

Pay envelopes with “hints” of the subject 
printed thereon might be distributed freely to 
factories so that employes would receive some 
mention of the Postal Savings System with 
their pay. 


140 





THE SOLUTION 


Other methods will be suggested by experts 
and an interested public as the work goes on. 

It should be remembered that the end in 
view is primarily that of inculcating changed 

IDEALS and CHANGED HABITS OF THOUGHT in the 

minds of the people. It is an attempt to direct 
their thought to a return to “the traditions of 
the fathers” 

A persistent effort to this end under Gov¬ 
ernment direction w r ill not be open to the pop¬ 
ular suspicion of having been impelled by some 
ulterior motive, as might be the case if the same 
literature were sent out by private individuals, 
banks, or even by philanthropic societies. 

The people are to be asked merely to culti¬ 
vate habits of Thrift for their own benefit 
and profit; the advantages will be shown to 
accrue to them directly, and without any inter¬ 
vention, or the intermediary of any private 
interest. 


141 





PROSPERITY 


The method of organization of a practical working 
force for appraising property and authorizing and 
extending Loans could be very simple, yet comprehen¬ 
sive and reliable. 

A standard form of appraisal procedure could be 
adopted from standardized specifications for property 
valuation. Blank forms for this purpose could be pre¬ 
pared by competent architects and builders so that the 
local appraisers would be obliged to follow a uniform 
procedure; and they would arrive at substantially 
accurate figures of valuation for the building. 

For the land values the figures set by local appraisers 
and tax assessors could be used as a basis for comparison 
after certain established value indices had been checked 
by the central office. The procedure would not be unlike 
that of life insurance companies that employ local 
physicians as examiners, and that have a central office 
board to pass finally on their results. 

The personal character of the individual borrower 
should also receive careful attention, since the moral 
hazard may be an important factor in the consideration 
of a Home Mortgage Loan. 

The Home Mortgage plan should give no encourage- 


142 





THE SOLUTION 


ment to speculative operations, but should confine its 
workings strictly to home ideals. 

A method of Government Life Insurance is advocated, 
similar to that utilized for the army. This should be 
obligatory on the borrowers of mortgages of high propor¬ 
tion to value, and it might be optional with those of 
lower ratio. 

A Postal Savings System Home Mortgage Loan 
should constitute a first lien on the insurance payable in 
the event of the decease of the borrower. 

To eliminate any necessity for the incurring of travel¬ 
ing expense by appraisers, local appraisal should be the 
medium employed. A regulation effective in the appoint¬ 
ment of appraisers should stipulate that such individuals 
have no connection with any financial institution, either 
as official, employe, or stockholder. 

There would be a distinct advantage in the appoint¬ 
ment of women to some of these positions, since the 
answers to every technical question asked in the blank 
form would be covered by a standard of practice therein. 
Local builders of good reputation would be eligible as 
appraisers. 

A uniform fee should be fixed by law, as in pension 
cases, so that there would be no temptation to increase 


143 





PROSPERITY 


the valuation. This fee, of course, would be paid to the 
appraisers by the Government, but it would be repaid 
to the Government by the borrower on completion of the 
loan contract and the execution of the required papers. 

The postmaster would be concerned in these transac¬ 
tions only as the fiscal agent of the Postal Savings 
System in receiving and forwarding the application for 
the loan, in the final payment of the mortgage funds by 
the Government, and in the receipt of subsequent monthly 
payments from the borrower. 

It would be possible to devise a coupon mortgage 
collection system in duplicate book form. One of these 
books would be retained by the postmaster and the other 
by the borrower. These books might consist of perfor¬ 
ated coupons. A coupon in the borrower’s book would 
be detached by him and handed to the postmaster with 
the money for his monthly payment. 

The postmaster likewise would detach the correspond¬ 
ing coupon from his book and hand it to the borrower 
as a receipt for the payment. 

Each would affix the slip, or coupon, received to the 
stub of the one detached in his respective book. So that 
the entire transaction would be handled without book 
entry of any kind by pen or pencil. 


144 





THE SOLUTION 


The process would be very simple and the coupons 
would merely require dating by the postmaster’s regular 
stamp of cancellation. 

The borrower’s book would indicate the exact date of 
the transaction, and the postmaster’s book would like¬ 
wise show the same condition. 

Such an arrangement would enable the Examiner to 
check up the proceedings at any call he might make. 

There would, of course, be the customary form of 
Bond and Mortgage executed by the borrower and duly 
recorded by the County Clerk in the County books, the 
usual fee being paid by the borrower. 

* * * 

In the matter of Title Search and Title 
Guarantee, a somewhat radical suggestion is 
made. Before any Government Loan should 
be available, the property should be duly 
recorded under the Torrens Act. 

In States where this Law is not yet on the 





PROSPERITY 


statute books, proper legislation would be 
needed. 

Nineteen States have already adopted the 
Torrens System of Land Registration. It 
is no longer an experiment. 

The object of the Torrens System is to do 
away with the continual searching of the title 
on the sale or mortgage of real property. It 
is a judicial procedure. 

On the registration of a title under the 
Torrens Law, a judicial determination is ob¬ 
tained which disposes of all questions in the 
title . It gives the owner the assurance that no 
one hereafter can assert any right against him, 
or question the marketability of his title. 

For thrifty and prudent home owners, the 
Torrens Law is distinctly advantageous and 
economical in a practical way, once a registra¬ 
tion has been recorded. 

The first cost of registration is the only 


146 





THE SOLUTION 


appreciable charge. It is no more than either 
the normal fee for search by an attorney, or 
for a policy of title insurance from a title com¬ 
pany; and yet it is inclusive of both in what it 
accomplishes. 

On subsequent transfer of the property, 
moreover, only a nominal fee has to be paid, 
while attorneys’ fees and title companies’ 
charges are the same each time a transfer of 
the property is made. 

An original registration under the Torrens 
Law might cost $40 to $60 for the average 
home, while transfer charges subsequently 
would be only $3 to $5. The only ones to profit 
through the absence of such a law are the 
attorneys and the title companies. They are 
an unnecessary tax on the home buyer. 

Under the Torrens System it is the func¬ 
tion of the State to protect the property inter¬ 
ests of the owner. This, obviously, is infinitely 


147 





PROSPERITY 


better than a policy of insurance issued by a 
private corporation conducted for private gain . 

Suitable provision should be made for subse¬ 
quent sales of property on which Postal Sav¬ 
ings System Home Mortgage Loans have 
been placed. Should the new buyer be able to 
pay the present owner’s Equity fully in cash, 
or should a mutually satisfactory arrangement 
be made between Buyer and Seller — covered 
by mortgage or otherwise — the original mort¬ 
gage might be allowed to run to maturity 
without change. Or, if the mortgage had been 
paid to the extent of a substantial reduction 
of the principal, arrangements should be effec¬ 
tive for the full and immediate payment and 
the issuance of an entirely new mortgage loan 
to the new buyer. This, of course, would be 
subject to the same procedure as the original 
mortgage already described. 

It is believed that it would be altogether safe 


148 





THE SOLUTION 


and practicable for the Government to make 
Loans for Home Mortgages under the plan 
set forth to the extent of 85% of the value of 
the property. 

This is considerably in excess of what is pos¬ 
sible to obtain under present procedure. 

But the purpose of this suggestion is to AID 
home owners. 

The home buyer today can secure an 85% 
loan in most cases, but he has to pay such ex- 
horbitant charges for the accommodation that 
few can afford it; certainly not the average 
home seeker. 

With the safeguards that are to accompany 
the plan , the assurance of fair valuation, the 
investigation of the cc moral risk/ J the insurance 
feature, and the fact that from the first month 
the loan is in a gradually diminishing propor- 


149 





PROSPERITY 


tion to the property value , the placing of an 
85% Mortgage is conservative and desirable . 

To circumvent fraudulent operations, and to 
assure the integrity of the loan, a feature 
might be introduced hy which further advances 
on the property would be illegal. That is to 
say, a clause in the mortgage indenture could 
nullify subsequent loans for a period of years; 
this v'ould operate as a restriction to deter 
others from making advances on the property. 

A distinctive name might be applied to such 
higher-proportioned mortgages to identify 
them readily in the County Records. 

It should not be forgotten that Building- 
and-Loan Associations have frequently loaned 
up to 75% of the value of property appraised 
by a method similar to that here suggested, but 
without the feature of insurance protection. 

Their losses on such loans have been 
negligible. 


150 





THE SOLUTION 


A fundamental idea in the Postal Sayings 
System Home Mortgage Loan suggestion is 
that such loans have the integrity of the indi¬ 
vidual as an underlying security, and that the 
moral risk is as much subject to appraisal as 
the value of the property. 

Inasmuch as it has long been an established 
rule of banking that Borrowers should be Cus¬ 
tomers of the bank, a similar plan might well 
be put into operation for the Postal Savings 
System. 

The need for a Plome Mortgage Loan is 
always known for some time in advance of the 
actual borrowing. An advantageous ruling 
might be made that would require a prospective 
Borrower to have been a Depositor in the 
Postal Savings System, say, for a year. 

No better or safer depository could be had 
for the future home buyer in which to place his 
savings in anticipation of home ownership . 


151 





PROSPERITY 


Collectively, such Depositors would thus be 
aiding other home owners by increasing the 
available funds of the Postal Savings System 
during the period before which their own needs 
arose. 

Furthermore, they would be establishing 
reputations for Thrift that would later re¬ 
dound to their credit when their own applica¬ 
tions for Home Mortgage Loans came to be 
filed. 

The safeguards with which the plan may be 
surrounded should be solely for the protection 
of the genuine home-seeking citizen, and to 
assure the utilization of the plan by them to 
the exclusion of speculative real estate manipu¬ 
lators. 

The plan of fixing the monthly payments at 
$6 per $1,000 is merely suggestive. Some 
other rate may be thought more suitable after 
further consideration of the plan. 


152 





THE SOLUTION 


As has already been indicated, the payment 
of this sum over a period of 20 years would 
bring the Postal Savings System a net re¬ 
turn of a trifle over 3%. Payments of $5 per 
month per $1,000 over a period of 25 years 
would net a slightly higher rate. 

The principal thought in offering this plan 
is to make Home Mortgage Loans available 
AT COST. 


* * * 


Some conception of the enormous aggregate 
saving that would accrue to the home owner’s 
benefit through the operation of this plan may 
be gained from the following figures. 

Under the former rate, or fee, of 2%% for 
loan negotiations, the funds now available in 


153 





PROSPERITY 


the Postal Sayings System would save the 
people more than 3 million dollars at the outset. 

The re-funding payments would then pro¬ 
vide additional funds for new loans, the bonus 
on which at the same rate would represent an 
annual total of more than $220,000. This, of 
course, is exclusive of the regular 6% interest, 
which in itself amounts to 9 million dollars a 
year. 

At the rate the people are at present being 
mulcted for loan bonuses, the initial saving — 
from the funds now available, observe — would 
amount to more than 30 million dollars. The 
continuous annual saving thereafter would be 
more than 2 million dollars. 

All this is what could be done with the pres¬ 
ent deposits of the Postal Savings System. 


154 





THE SOLUTION 


And the people allow the banks to borrow 
this money from the Postal Savings System 
at 2%% per annum! 

Why, the bankers' profits alone from these 
operations would finance more than 40,000 
homes NOW. 

Figure it for yourself. 

Two and one-half per cent on 150 millions 
is $3,750,000. This is what the bankers PAY 
for the use of the people’s money. 

They GET: 6% on 150 millions which is 
$9,000,000 interest, exclusive of any bonus 
charges. With what they seem to think now 
is only a fair bonus (20%) they get $30,000,- 
000. In addition to this they get the interest 
on the bonds they deposited with the Postal 
Savings System to secure their loan — anoth¬ 
er 4%, or $6,000,000 more. 


155 





PROSPERITY 


In other words, they receive $45,000,000 in 
interest and bonus together while paying out 
only $3,750,000 to the Postal Savings Sys¬ 
tem for the use of the people’s money. 

The net return on their original investment 
of 150 millions is in excess of 41 million dollars! 

Is it any wonder they have come to regard 
themselves as Double-Size Men? 


“In 1626, it cost the Pilgrim Fathers 30% and 
50% “interest” to get money in London to buy 
out the English merchants that had a lien on the 
colonists* homes. 

Perhaps some of our Money Lenders are trying 
to make history repeat itself. 


^ ^ ^ ^ 


156 





9 


POSSIBILITIES 


1 -ADVANTAGE TO HOME OWNERS 

2 — 20-year refunding 

3 — 25-year refunding 

4 -ANNUAL COSTS 

5 - 50,000 NEW HOMES POSSIBLE NOW 

6 — new Zealand's example 

7 - POWER OF THRIFT 

8 - BILLIONS FOR PROSPERITY 

9 - CONTINUOUS PROSPERITY 


157 


“Respectable people withdrew from the trade, 
and the money lending business was entirely in 
the hands of the Shylocks. ***** 
Those who had to borrow coin were obliged to 
submit to the expensive subterfuges of the Shy- 
locks, from whose net, once caught, there was 
little chance of escape.” 

A. Egmont-Hake 

Free Trade in Capital; Chapter VII 


158 


9 


POSSIBILITIES 


T HE FINANCIAL comfort assured to 
the home owner when he is able to secure 
funds for needed mortgage loans at COST, 
is best illustrated by practical examples. 

Two of these are given. 

In the first (Example 12), the cost of the 
20-year redemption, or refunding, plan is 
calculated. In the second (Example 13), the 
25-year refunding plan is shown. 

By comparing these results with the figures 
of the examples already given (Examples 1 to 
10, inclusive) a marked difference will be seen. 

The cost of carrying a $4,000 home by the 
plan herein advocated for adoption by the 
United States Postal Savings System for 


159 


PROSPERITY 


HOME MORTGAGE LOANS, under con¬ 
ditions in which the home owner would utilize 
the plan to the limit of borrowing capacity is 
illustrative of the largest monthly charge 
possible. 

Since the plan contemplates a maximum 
First Mortgage of 85% of the value of the 
property, the home seeker would be able to 
undertake a purchase by making a cash pay¬ 
ment of 15%. 

Fifteen per cent of $4,000 is $600. 

The Equity Statement at the outset, then, 
would be as follows: 


Example 11 


Equity (Amount paid in Cash).$600. 

Amount of Postal Savings System 85% 

First Mortgage Loan.3,400. 

Total Value of House.$4,000. 


160 









POSSIBILITIES 


The annual cost for occupying the house, 
then, would be as follows: 

Example 12 

Interest on Equity of $600 @ 3$21.00 

I nterest and Refunding Payments on an 
85% Postal Savings System Home 


Mortgage Loan of $3,400 at $6 per 

month per $1,000. 244.80 

(This is at the rate of $20.40 per 
month) 

Carrying Charges as in Example 1_ 194.00 


Total Annual Cost.$459.80 


or an average per month of $38.32. 

In this case the owner’s actual cash outlay is 
$36.57 per month; the interest loss is $1.75. . 

This cost would be continuous monthly for 
20 years, at the end of which time the house 
would be FREE AND CLEAR, and the cost 
of occupancy would be as shown in Example 1. 

Should it be determined to adopt the plan 
of requiring payments of $5 per month per 


161 








PROSPERITY 


$1,000 over a period of 25 years, the cost would 
be as follows: 


Example 13 


Interest on Equity of $600 @ 3y 2 %— $21.00 

Interest and Refunding Payments on an 
85% Postal Savings System Home 
Mortgage Loan of $3,400 at $5 per 

month per $1,000. 204.00 

(This is at the rate of $17 per month) 

Carrying Charges as in Example 1.194.00 


Total Annual Cost.$419.00 


or an average per month of $34.92. 

In this case the owner’s actual cash outlay is 
$33.17 per month; the interest loss is $1.75. 

Monthly payments of $33.17 would be con¬ 
tinued, then, for 25 years, at the end of which 
time the home would be FREE AND 
CLEAR. 

There would, of course, be no arbitrary re- 


162 









POSSIBILITIES 


quirement on the part of the Government to 
insist that the borrower should obligate him¬ 
self to the full extent of an 85% Home Mort¬ 
gage Loan. Any amount less than 85% could 
be obtained on a Home Mortgage Loan, down 
to a minimum of, say, $500. 

It should be noted that in all these Examples 
a part of the cost that has been indicated is a 
charge for Interest on the house owner’s 
Equity. 

This Interest charge is, of course, not an 
expenditure by the owner, but it has been in¬ 
cluded in the cost of Carrying Charges on the 
assumption that if the money were not invested 
in the home, it would be on deposit in a savings 
bank where it would be drawing interest in the 
amount shown. 

Were the owner a renter, this money would 
be available to help him pay his rent. Its with¬ 
drawal from the bank and investment in the 


163 





PROSPERITY 


home, therefore, represents a loss of income 
that must be included in the cost of “carrying” 
the home. The amount of cash that must be 
actually paid out by the owner, though, is in 
each case clearly shown. 

It is altogether probable that with the com¬ 
ing into popular favor of the Postal Savings 
System, the Private Stock and the Mutual 
Savings Banks will reduce their interest rate. 
In such an event, the cost of Carrying Charges 
shown would be less, and that much more to the 
house owner’s advantage. The difference, how¬ 
ever, is very slight. 

Under either of these plans the ownership 
of a home could be enjoyed at a cost that is 
practically no more than was paid for rent in 
pre-war days. 

And in addition to this achievement, the 
young home owner is meanwhile, and at no 
additional cost, actually paying for the house; 


164 





POSSIBILITIES 


and he will have it FREE AND CLEAR 
within the period of the early portion of his 
life — to enjoy for the rest of his days. 

Should illness or misfortune overtake him, 
he will have the advantage of knowing that his 
expense for house occupancy is on the lowest 
possible basis. 

He will have the further satisfaction of 
knowing that he is the owner of a substantial 
collateral that may again be used for loan pur¬ 
poses should circumstances require it. 

To bring such possibilities within the reach 
of our population is almost to contemplate the 
approach of the millenium. 

Yet it is within our grasp if we choose to 
avail ourselves of the privilege. 

We have but to say the word — to reach out 
our hand and the thing is done! 

Too much emphasis can not be laid on the 
part that woman is to play in the movement 


165 





PROSPERITY 


to secure 3% Home Mortgage Loans, or 
Home Mortgage Loans at cost. 

The home is particularly woman’s domain. 
It is woman’s sphere. It is her most important 
field of activity. She spends the greater por¬ 
tion of her life within its walls. The spirit of 
ownership is inborn in woman — it needs no 
cultivation. 

In every State and in the affairs of the 
Nation woman’s voice is now equal with that 
of man. 

A movement to secure Postal Savings Home 
Mortgage Loans inaugurated or endorsed by 
her would be irresistible. And she will see to 
it that funds for deposits in the Postal Sav¬ 
ings System Banks are forthcoming once the 
opportunity is afforded. 

Every home-loving woman in the land will 
endeavor to emulate the spirit of Priscilla 
Wakefield, the English woman to whom 


166 





POSSIBILITIES 


credit is due for the establishment of the first 
savings banks in the world . 

The adoption of such a plan as here advo¬ 
cated for Home Mortgage Loans by the 
United States Postal Savings System will 
revolutionize home building and home finan¬ 
cing. It will place home ownership in an 
entirely different and far more enviable light. 

It will do as much or more in this direction 
as the establishment of the Federal Reserve 
Bank has theoretically accomplished in stabiliz¬ 
ing the monetary system of the country. 

Let it be understood, however, that the func¬ 
tions of the conscientious, honorable and far¬ 
sighted banker will be in no wise impaired by 
the operation of this proposed plan. There 
are plenty of legitimate commercial and manu¬ 
facturing enterprises awaiting development. 


167 







PROSPERITY 


There is already available a f und that would 
provide FIFTY THOUSAND such homes 
NOW, and if the fund were never increased it 
would provide for 300 new homes every month 
throughout the year. 

This fund has been accumulated without any 
ostentation and without any attempt to encour¬ 
age its growth. As already remarked, even the 
plan on which it operates is scarcely known by 
the majority of the people. 

Let us investigate the possibilities for 
growth and expansion. 

The example set by New Zealand has 
already been mentioned. 

Were we to attain figures of such propor¬ 
tion here and accumulate a fund of $18,000,- 
000,000, capital enough for 6 million homes 
would be available — with continuous provision 
for new homes without further deposits in the 
Postal Savings System, at the rate of 12 


168 





POSSIBILITIES 


thousand every month throughout the year, 
and in the years to come. 

This is far in excess of our requirements. 

No such amount of building is contemplated 
or needed. 

Before the fund reaches such figures — and 
it will not only reach, but far surpass them, 
once the requisite impetus has been given to 
the movement — other and more profitable 
outlets for their employment will undoubtedly 
have been developed and adopted. 


Would it be beneficial or otherwise to the 
business interests of the country to have com¬ 
mercial loans on a 5°/o } in place of a 6°/o, basis? 


What may reasonably be expected to result 
when the United States Postal Savings Sys- 


169 





PROSPERITY 


tem extends the privilege of 3% Home Mort¬ 
gage Loans, Rediscounts the Federal Reserve’s 
commercial paper at 5%, and the country 
reaches the New Zealand average? 


On the assumption that a fund of $3,000,- 
000,000 would amply care for Home Mort¬ 
gage Loans requirements — it would provide 
a million homes with an average mortgage of 
$3,000 each, and furnish new loans of the same 
amount for 5,000 more mortgages each month 
from the repayments — there would be left for 
commercial use 15 Billion Dollars. 

This assumes that the American People will 
prove as thrifty as the New Zealanders. 

There are three principal sources from which 
the funds of the Postal Savings System 
would naturally be augmented: (1) school 


170 





POSSIBILITIES 


children; (2) rural population; (3) city and 
factory workers: 

20 million school children 
saving an average of 2 
cents a day in 1 year 
would produce a fund of 

more than.$ 100,000,000 

25 million rural population 
saving an average of 10 
cents a day in 1 year 
would produce a fund of 

more than. 600,000,000 

20 million city and factory 
workers saving an average 
of 20 cents a day in 1 
year would produce a 
fund of more than. 1,300,000,000 

65 million thrifty people in 
the nation would produce 
in 1 year a total fund of 
more than.$2,000,000,000 

These figures are not extravagant. 


171 










PROSPERITY 


Nor are they beyond the capacity or power 
of the people to save. 

They were greatly surpassed when we were 
confronted with a war emergency which was 
really far less dangerous than the situation that 
now threatens our national life, and of which 
the Housing Shortage is merely an incidental 
Effect. 

Two billion dollars in one year for the 
Postal Sayings System/ 

Two billion dollars of the people’s money to 
be applied annually to the people's needs! 

Two billion dollars of new money annually 
in the hands of the United States Government 
to provide home mortgage loans for the 
people at the true economic COST of money! 

Two billion dollars each year on which the 
Federal Reserve might draw for the redis¬ 
count of its collateral at 5% l 

Two billion dollars every year to provide 


172 





POSSIBILITIES 


long-term loans for Foreign Trade Extension 
— so badly needed! 

Two billion dollars of OUR money — yours 
and mine —to keep every worker in the coun¬ 
try constantly employed — to keep every fac¬ 
tory wheel turning! 

Two billion dollars — every year — that 
educational facilities may be extended in this 
prosperous land; that teachers may be ade¬ 
quately remunerated; and that scholarships 
may be provided for the boys and girls of our 
grammar and high schools. Let it be no longer 
said that they have to leave school “to go to 
work”! 

Two billion dollars this year, next year, the 
year after, and every year, that life insurance 
and annuities may be brought at COST within 
the reach of the people! 

Two billion dollars for refunding the public 
debt, and for the creation of a sinking fund 


173 





PROSPERITY 


to effect complete amortization of every dollar 
owed by the Government! 

Billions /or Prosperity! 

Billions for Prosperity — but not one cent 
for speculation! 

Two billion dollars! $2,000,000,000! 

Do the figures seem large? 

Does the attainment seem impossible? 

This is only one-third of the actual net sav¬ 
ings of the French Nation for last year — 
19201 

This is the official estimate of our own 
Economist Consul, Hon. Charles D. West- 
cott, in Paris, as reported by him to the United 
States Department of Commerce at Washing¬ 
ton and published by the Department on page 
543 of Commerce Reports for October 31, 
1921. 

This is the truth. 


174 





POSSIBILITIES 


This is not fiction; it is fact. 

This is not what can be done — perhaps; it 
is what has been done. 


This is not merely idealistic or visionary; it 
is what actually has been accomplished; it is 
the act 'performed. Two billion dollars? Our 
own total, conservatively estimated, should be 
nearer Eleven Billions! 


If it were possible to attain a sum for de¬ 
posits in the Postal Savings System and to 
utilize the money as suggested, in the same 
proportion that France is now demonstrating 
her ability to save, our entire national debt 
would be wiped out of existence in 11 years 
from the proceeds that would accrue from 
commercial re-discounts at 5%. 


175 






PROSPERITY 


Away with this nonsense about money being 
“tight” and “scarce” 

Away with the Bonus and its trail of Finan¬ 
cial Disaster. 

Away with the Usurer and his corrupt prac¬ 
tices. Let him be ferreted out of his suave 
seclusion, under whatever cloak or pretense he 
chooses to hide. Let his name be anathema. 

Let the light of day shine on some of these 
nefarious practices, and let us see in the open 
the REAL CAUSE of our national disturb¬ 
ance. 

Let us not deceive ourselves with the thought 
or delusion that matters will right themselves 
if we only give them time to “work themselves 
out.” 

The longer we wait, the worse “conditions” 
will become. 

With all this talk about the scarcity and 
tightness of money, we have now in circulation 


176 





POSSIBILITIES 


something over five times the ratio that eco¬ 
nomists once thought necessary. Furthermore, 
we now have a credit system far more extensive 
and elastic than prevailed at that time. 

Is it possible that some of our troubles lie 
in the fact that we have too much money rather 
than too little? 

Or, is it perhaps not true that money has 
acquired a habit of staying in the wrong 
channels? 

The sooner the flow of money is directed in¬ 
to the People's Bank the sooner Prosperity will 
come in the land. To stay. 

There is no more excuse for a permanent 
condition of prosperity to be lacking in this 
country than there is for the waters to fail in 
the Hudson, the Mississippi, the Rio Grande, 
or the Columbia. 

It would be the sheerest nonsense to contend 
that habits of Thrift in the Individual consist- 


177 





PROSPERITY 


ently used and constantly applied will produce 
intermittent periods of prosperity and happi¬ 
ness were the individual dissociated from 
ulterior outside influences. Likewise, a Thrifty 
Community and a Thrifty Nation should enjoy 
Continuous Prosperity . 

As a nation we are not only self-sustaining 
and self-contained with respect to the neces¬ 
sities of life, but other nations are compelled 
to draw on us for their requirements. 

Our Nile never fails to overflow, and the 
granaries of the country are filled to bursting 
with bumper crops. 

The country is too vast and too widely 
diversified to be affected as a whole by any 
insignificant or occasional local crop shortage 
we have ever had or of which we can conceive. 

Our distribution facilities are spread like a 
network over the country, and foodstuffs, the 
necessities of life — yes, even its luxuries — 

178 





POSSIBILITIES 


may be brought to the doorstep of every home 
in the land. 

Until we are visited by the gaunt Specter of 
famine or pestilence — which, please the 
Almighty, may never be — there is no occasion 
to entertain fear or apprehension. 

Yet today five million people walk the streets 
without work, thousands sleep in the parks, 
men die of starvation on city piers, and young 
men are auctioned on the block by a fanatic 
on the spot where, 150 years ago 10-year-old 
American boys defied British soldiers . 

THE REMEDY HAS BEEN SUGGESTED. 

Are you ready to demand it? 

* * * * * 


179 



























































































































































M 






IN PREPARATION 


The second book of this series is 
now in preparation, and will be 
ready for distribution early in 1922. 

It will be uniform in size, binding 
and price ($2) with the present vol¬ 
ume. 

To insure prompt delivery of your 
copy mail your order today, using the 
blank on the following page. 


Monograph Publishing Corporation, 
NEW YORK 


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